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Item 8. Financial Statements and Supplementary Data

2024-02-29 compared with 2023-03-29 · 1303 added, 555 removed, 65 unchanged (97% of the section changed)

FINANCIAL STATEMENTS AND SUPPLEMENTARY FINANCIAL INFORMATION

Financial Statements and Supplementary Data

LanzaTech Global, Inc.

(FORMERLY KNOWN AS AMCI ACQUISITION CORP.

Index to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm (PCAOB Firm ID # 34 )

Consolidated Financial Statements:

Consolidated Balance Sheets as of December 31, 2022 and 2021

Consolidated Statements of Operations for the year ended December 31, 2022 and for the period from January 28, 2021 (inception) through December 31, 2021

Consolidated Statements of Changes in Stockholders’ Deficit for the year ended December 31, 2022 and for the period from January 28, 2021 (inception) through December 31, 2021

Consolidated Statements of Cash Flows for the year ended December 31, 2022 and for the period from January 28, 2021 (inception) through December 31, 2021

Notes to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting

C onsolidated Balance Sheets as of December 31, 2023 and 2022

Consolidated Statements of Operat ions and Comprehensi ve Loss for the Years Ended December 31, 2023 and 2022

Consolida ted Statements of Changes in Redeemable Preferred Stock and Shareholders ’ Equity/ Deficit for the Years Ended December 31, 2023 and 2022

C onsolidated Statements of Cash Flows for the Years Ended December 31, 2023 and 2022

Notes to Con solidated Financial Statements

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of

LanzaTech Global, Inc.

(formerly known as AMCI Acquisition Corp.

To the shareholders and the Board of Directors of LanzaTech Global, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of LanzaTech Global, Inc.

(formerly known as AMCI Acquisition Corp.

II) (the “Company”) as of December 31, 2022 and 2021, the related consolidated statements of operations , changes in stockholders’ deficit and cash flows for the year ended December 31, 2022 and for the period from January 28, 2021 (inception) through December 31, 2021, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for the year ended December 31, 2022 and for the period from January 28, 2021 (inception) through December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

and subsidiaries (the "Company") as of December 31, 2023 and 2022, the related consolidated statements of operations and comprehensive loss, the consolidated statement of cash flows, and the consolidated statements of changes in redeemable convertible preferred stock and shareholders' equity (deficit), for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 29, 2024, expressed an adverse opinion on the Company's internal control over financial reporting because of material weaknesses.

Basis for Opinion

1 unchanged sentence

Our responsibility is to express an opinion on the Company's financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits , we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.

Accordingly, we express no such opinion.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

2 unchanged sentences

We believe that our audits provide a reasonable basis for our opinion.

/s/ Marcum LLP

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Revenue Recognition – Identification and evaluation of relevant terms and conditions in new or amended contracts with customers and application to such contracts of Accounting Standards Codification (ASC) Topic 606 – Revenue From Contracts With Customers (ASC 606) - Refer to Notes 2 and 5 to the financial statements

Description of Critical Audit Matter

The Company earns revenue from the sale of a variety of products and services to its customers including services related to biorefining which includes feasibility studies and basic engineering design of commercial plants, licensing of technologies and sales of biocatalysts.

The other two revenue streams are:

(1) joint development and contract research activities to develop and optimize novel biocatalysts, related processes and technologies, and (2) supply of chemical building blocks for sustainable products produced using the Company’s proprietary technologies (referred to as CarbonSmart).

The terms and conditions of the Company’s contracts with its customers vary and assessing the accounting impact of the terms and conditions of each individual contract requires judgment as contracts may contain provisions unique to that

We identified our assessment of the Company’s identification and evaluation of relevant contract terms and conditions and application of ASC 606 to new or amended contracts with customers as a critical audit matter because it required significant audit effort and auditor judgment.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the Company’s conclusions on the identification and evaluation of relevant contract terms and conditions and the appropriate application of ASC 606 to new or amended contracts with customers included the following, among others:

– We obtained new or amended contracts with customers and performed the following procedures, among others:

– Inspected the terms and conditions contained in the contract and supporting documents and, where necessary, confirmed the terms of the contract directly with the customer.

– For certain new or amended contracts, assessed the Company’s application of ASC 606 by:

◦ Evaluating the Company’s identification of the performance obligation or obligations in the contract.

◦ Evaluating the Company’s conclusions regarding the timing of recognizing revenue in accordance with ASC 606.

Accounting for the Forward Purchase Agreement (FPA) Put Option - Refer to Notes 2 and 9 to the financial statements

Description of Critical Audit Matter

On February 3, 2023, the Company entered into an FPA with Atalaya Capital Management LP (“ACM”).

The FPA Put Option, which includes both the In-substance Written Put Option and the Variable Maturity Consideration, is recorded as a derivative liability measured at fair value in the consolidated balance sheet.

The Company’s evaluation of the appropriate accounting model to apply to the FPA Put Option required significant judgment.

We determined our audit of the Company’s evaluation of the appropriate accounting model to apply to the FPA Put Option was a critical audit matter because it involved a high degree of auditor subjectivity and required significant audit effort, including the need to involve professionals in our firm with expertise in accounting for complex financial instruments.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the accounting for the FPA Put Option included the following, among others:

– With the assistance of professionals in our firm having expertise in accounting for complex financial instruments, we assessed the reasonableness of the Company’s conclusions as to the appropriate accounting for the FPA Put Option in accordance with accounting principles generally accepted in the United States by:

◦ Evaluating the Company’s identification of relevant terms and conditions of the FPA.

◦ Evaluating the Company's application of available accounting guidance to the FPA Put Option.

– We evaluated the accuracy and completeness of the disclosures related to the accounting for the FPA Put Option in the financial statements.

Brookfield SAFE Liability – Conversion to Equity Assumption– Refer to Notes 2 and 7 to the financial statements

Description of Critical Audit Matter

On October 2, 2022, the Company entered into a Simple Agreement for Future Equity (the “Brookfield SAFE Agreement”) and a framework agreement (the “Brookfield Framework Agreement”) with BGTF LT Aggregator LP (“Brookfield”).

Pursuant to the Brookfield SAFE Agreement, the Company received $50 million (the “Initial Purchase Amount”) which is repayable in cash, plus interest of 8% per annum, on the fifth anniversary of the Brookfield Safe Agreement.

The Company accounts for the Brookfield SAFE liability at fair value which was $25.2 million as of December 31, 2023.

Pursuant to the Brookfield Framework Agreement, the Company agreed to present Brookfield, on an exclusive basis, the opportunity to provide equity financing for carbon capture and transformation projects in the Company’s development pipeline once those projects meet certain defined investment criteria (“Qualified Projects”).

A key input into the valuation of the Brookfield SAFE liability is the assumption regarding the portion of the Initial Purchase Amount that will be converted to equity (and the corresponding portion of accrued interest that will be forgiven) as a result of presentation of Qualified Projects to Brookfield.

The valuation of the Brookfield SAFE liability is highly sensitive to such assumption and selection of such assumption is subjective and requires a high degree of judgment by management of the Company.

We identified the valuation of the Brookfield SAFE Liability as a critical audit matter because its value is highly sensitive to changes in the assumption regarding the portion of the Initial Purchase Amount that will be converted to equity (and the corresponding portion of accrued interest that will be forgiven).

Evaluating this assumption required a high degree of auditor judgment and significant audit effort to evaluate the sufficiency of audit evidence relating to the Company’s estimate.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the valuation of the Brookfield SAFE liability included the following, among others:

– We inspected the Brookfield Framework Agreement and obtained an understanding of its key terms, including the investment criteria that need to be met for a project to be considered a Qualifying Project.

– We inspected the Company’s project development pipeline to assess the nature and quantity of projects that could be developed into Qualifying Projects.

– We made selections of projects from the project development pipeline and made inquiries of project managers to understand the status of the project relative to meeting the investment criteria and evaluated the reasonableness of the Company’s assessment of the probability the selected project will become a Qualifying Project prior to the fifth anniversary of the Brookfield SAFE Agreement.

– We performed a lookback analysis on the status of the projects included in the project development pipeline to evaluate for management bias in developing its assumption.

/s/ Deloitte & Touche LLP

February 29, 2024

We have served as the Company's auditor since 2021.

March 28, 2023

Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting

To the shareholders and the Board of Directors of LanzaTech Global, Inc.

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of LanzaTech Global, Inc.

and subsidiaries (the “Company”) as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, because of the effect of the material weaknesses identified below on the achievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2023, of the Company and our report dated February 29, 2024, expressed an unqualified opinion on those financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Material Weaknesses

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

The following material weaknesses have been identified and included in management's assessment:

• The Company has not effectively designed and implemented internal controls related to accounting for complex transactions and estimates requiring significant judgment.

• The Company’s controls over revenue recognition were not designed and operating at the appropriate level of precision to address the complexity inherent in their revenue cycle.

These material weaknesses were considered in determining the nature, timing, and extent of audit tests applied in our audit of the consolidated financial statements as of and for the year ended December 31, 2023, of the Company, and this report does not affect our report on such financial statements.

/s/ Deloitte & Touche LLP

February 29, 2024

LANZATECH GLOBAL, INC.

(FORMERLY KNOWN AS AMCI ACQUISITION CORP.

CONSOLIDATED BALANCE SHEETS

December 31, 2023 December 31, 2022

Current assets:

Cash $ 6,671 $ 343,399

Prepaid expenses – current 190,645 337,534

Cash and cash equivalents $ 75,585 $ 83,045

Held-to-maturity investment securities

Trade and other receivables, net of allowance 11,157 11,695

Contract assets 28,238 18,000

Other current assets 12,561 11,157

Total current assets 172,700 123,897

197,316 680,933

Prepaid expenses – long-term — 184,812

Investments held in trust account 152,296,551 150,006,015

$ 152,493,867 $ 150,871,760

Liabilities, Class A Common Stock Subject to Possible Redemption and Stockholders’ Deficit:

Property, plant and equipment, net 22,823 19,689

Right-of-use assets 18,309 6,969

Equity method investment 7,066 10,561

Equity security investment 14,990 14,990

Other non-current assets 5,736 750

Total assets $ 241,624 $ 176,856

Liabilities, Contingently Redeemable Preferred Stock, and Shareholders’ Deficit

Current liabilities:

Accounts payable $ 4,060 $ 7,455

Accrued expenses 2,257,059 229,733

Due to related party 1,374,000 49,723

Capital base tax payable 394,311 198,129

Franchise tax payable 43,552 188,237

Income tax payable 309,320

Other accrued liabilities 7,316 4,502

AM SAFE liability — 28,986

Warrants 7,614 4,108

Contract liabilities 3,198 3,101

Accrued salaries and wages 5,468 7,031

Current lease liabilities 126 798

Total current liabilities 27,782 55,981

6,873,239 751,356

Deferred underwriting commissions 200,000 5,250,000

Derivative warrant liabilities 2,640,370 5,610,000

Non-current lease liabilities 19,816 6,615

Non-current contract liabilities 8,233 10,760

Fixed Maturity Consideration 7,228 —

FPA Put Option liability

Brookfield SAFE liability 25,150 50,000

Other long-term liabilities 1,421 1,591

Total liabilities 127,153 124,947

9,713,609 11,611,356

Commitments and Contingencies (see Note 5)

Class A common stock subject to possible redemption, $0.0001 par value;

15,000,000 shares issued and outstanding at approximately $10.07 and $10.00 per share at redemption as of December 31, 2022 and 2021, respectively 151,113,633 150,000,000

Stockholders’ Deficit:

Preferred stock, $0.0001 par value; 1,000,000 shares authorized; no shares issued or outstanding as of December 31, 2022 and 2021 — —

Class A common stock, $0.0001 par value;

280,000,000 shares authorized;

no non-redeemable shares issued or outstanding as of December 31, 2022 and 2021 — —

Class B common stock, $0.0001 par value;

20,000,000 shares authorized;

3,750,000 shares issued and outstanding as of December 31, 2022 and 2021 375 375

Contingently Redeemable Preferred Stock

Redeemable convertible preferred stock, $ 0.0001 par value;

20,000,000 and 130,133,670 shares authorized, — and 129,148,393 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively

Shareholders’ Deficit

Common stock, $ 0.0001 par value;

400,000,000 and 158,918,093 shares authorized, 196,642,451 and 10,422,051 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively

Additional paid-in capital 943,960 24,782

Accumulated other comprehensive income 2,364 2,740

Accumulated deficit ( 831,872 ) ( 456,245 )

Total stockholders’ deficit

( 8,333,375 ) ( 10,739,596 )

Total Liabilities, Class A Common Stock Subject to Possible Redemption and Stockholders’ Deficit

$ 152,493,867 $ 150,871,760

The accompanying notes are an integral part of these consolidated financial statements.

Total shareholders’ equity (deficit) $ 114,471 $ ( 428,722 )

Total liabilities, contingently redeemable preferred stock, and shareholders' equity $ 241,624 $ 176,856

See the accompanying Notes to the Consolidated Financial Statements.

LANZATECH GLOBAL, INC.

(FORMERLY KNOWN AS AMCI ACQUISITION CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Year Ended December 31, 2022 For the Period from January 28, 2021 (inception) through December 31, 2021

General and administrative expenses $ 5,923,760 $ 951,461

General and administrative expenses – related party 120,000 50,000

Capital base tax expense 246,182 198,129

Franchise tax expense 200,050 188,237

Loss from operations ( 6,489,992 ) ( 1,387,827 )

Other income (expenses):

Change in fair value of derivative warrant liabilities 2,969,630 1,905,000

Gain from extinguishment of deferred underwriting commissions on public shares 171,700

Offering costs allocated to derivative warrant liabilities — ( 476,450 )

Income from investments held in trust account 2,299,536 6,015

Income (loss) before income tax expense

( 1,049,126 )

Income tax expense 309,320

Net income(loss)

CONSOLIDATED STATEMENTS OF OPERATIONS AND

COMPREHENSIVE LOSS

Year Ended December 31,

Revenue from contracts with customers and grants

$ 45,953 $ 27,798

Weighted average shares outstanding of Class A common stock, basic and diluted

Revenue from sales of CarbonSmart products

Revenue from collaborative arrangements 5,529 2,575

Revenue from related party transactions 5,812 2,970

Total revenue 62,631 37,343

Cost and operating expenses:

Cost of revenue from contracts with customers and grants (exclusive of depreciation shown below)

( 37,653 ) ( 22,912 )

Basic and diluted net income (loss) per share, Class A common stock

Cost of revenue from sales of CarbonSmart products (exclusive of depreciation shown below)

( 4,889 ) ( 3,648 )

Weighted average shares outstanding of Class B common stock, basic and diluted

Cost of revenue from collaborative arrangements (exclusive of depreciation shown below) ( 2,265 ) ( 1,250 )

Cost of revenue from related party transactions (exclusive of depreciation shown below) ( 172 ) ( 477 )

Research and development expense ( 68,142 ) ( 53,191 )

Depreciation expense ( 5,452 ) ( 4,660 )

Selling, general and administrative expense ( 50,438 ) ( 26,804 )

Total cost and operating expenses ( 169,011 ) ( 112,942 )

Loss from operations ( 106,380 ) ( 75,599 )

Other income (expense):

Interest income, net 4,572 8

Other expense, net ( 29,388 ) ( 2,757 )

Total other expense, net

( 24,816 ) ( 2,749 )

Basic and diluted net income (loss) per share, Class B common stock

Loss before income taxes ( 131,196 ) ( 78,348 )

Income tax expense — —

(Loss) gain from equity method investees, net

( 2,902 ) 1,992

The accompanying notes are an integral part of these consolidated financial statements.

Net loss $ ( 134,098 ) $ ( 76,356 )

Other comprehensive loss:

Foreign currency translation adjustments ( 376 ) ( 1,449 )

Comprehensive loss $ ( 134,474 ) $ ( 77,805 )

Unpaid cumulative dividends on preferred stock ( 4,117 ) ( 38,672 )

Net loss allocated to common shareholders $ ( 138,215 ) $ ( 115,028 )

Net loss per common share - basic and diluted $ ( 0.79 ) $ ( 12.37 )

Weighted-average number of common shares outstanding - basic and diluted 176,023,219 9,302,080

See the accompanying Notes to the Consolidated Financial Statements.

LANZATECH GLOBAL, INC.

(FORMERLY KNOWN AS AMCI ACQUISITION CORP.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

FOR THE YEAR ENDED DECEMBER 31, 2022 AND FOR THE PERIOD FROM JANUARY 28, 2021 (INCEPTION) THROUGH DECEMBER 31, 2021

Common Stock Additional Paid-In Capital Accumulated Deficit Total Stockholders’ Deficit

Class A Class B

CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE CONVERTIBLE PREFERRED STOCK AND SHAREHOLDERS’ EQUITY/ DEFICIT

Redeemable Convertible Preferred Stock Common Stock Outstanding Additional Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Income Total Shareholders' Equity / (Deficit)

Shares Amount Shares Amount

Balance – January 28, 2021 (inception)

— $ — — $ — $ — $ — $ —

Issuance of Class B common stock to Sponsor — — 4,312,500 431 24,569 — 25,000

Excess cash received over the fair value of the private warrants — — — — 1,085,000 — 1,085,000

Forfeited shares — — ( 562,500 ) ( 56 ) 56 — —

Contribution from Sponsor upon sale of founder shares to Anchor Investors — — — — 6,509,758 — 6,509,758

Accretion of Class A common stock subject to possible redemption amount — — — — ( 7,619,383 ) ( 10,786,709 ) ( 18,406,092 )

Net income — — — — — 46,738 46,738

Balance – December 31, 2021

— $ — 3,750,000 $ 375 $ — $ ( 10,739,971 ) $ ( 10,739,596 )

Extinguishment of deferred underwriting commissions on public shares — — 0 — 4,878,300 — 4,878,300

Reclass from additional paid-in capital to accumulated deficit — — — — ( 4,878,300 ) 4,878,300 —

Subsequent remeasurement of Class A common stock subject to possible redemption — — — — — ( 1,113,633 ) ( 1,113,633 )

Balance as of December 31, 2022 29,521,810 $ 480,631 2,382,358 $ — $ 24,783 $ ( 456,245 ) $ 2,740 $ ( 428,722 )

Retroactive application of recapitalization 99,626,583 — 8,039,693 1 ( 1 ) — — —

Adjusted balance, beginning of period 129,148,393 480,631 10,422,051 1 24,782 ( 456,245 ) 2,740 ( 428,722 )

Stock-based compensation expense — — — — 14,957 — — 14,957

RSA vesting — — 2,535,825 — — — — —

Repurchase of equity instruments — — ( 771,141 ) — ( 7,650 ) — — ( 7,650 )

Net loss — — — — — ( 134,098 ) — ( 134,098 )

Balance - December 31, 2022

— $ — 3,750,000 $ 375 $ — $ ( 8,333,750 ) $ ( 8,333,375 )

The accompanying notes are an integral part of these consolidated financial statements.

Issuance of common stock upon exercise of options — — 1,661,698 — 2,550 — — 2,550

Exercise of a warrant, Series C and D Preferred Stock 594,309 5,890 — — — — — —

In-kind payment of preferred dividend — 241,529 — — — ( 241,529 ) — ( 241,529 )

Conversion of preferred stock into common stock ( 129,742,702 ) ( 728,050 ) 153,895,644 15 728,035 — — 728,050

Recapitalization, net of transaction expenses (Note 3) — — 28,898,374 3 236,970 — — 236,973

Forward Purchase Agreement prepayment — — — — ( 60,547 ) — — ( 60,547 )

Reclassification of warrants to equity — — — — 4,863 — — 4,863

Foreign currency translation — — — — — — ( 376 ) ( 376 )

Balance as of December 31, 2023 — $ — 196,642,451 $ 19 $ 943,960 $ ( 831,872 ) $ 2,364 $ 114,471

LANZATECH GLOBAL, INC.

(FORMERLY KNOWN AS AMCI ACQUISITION CORP.

CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE CONVERTIBLE PREFERRED STOCK AND SHAREHOLDERS’ EQUITY/ DEFICIT

Redeemable Convertible Preferred Stock Common Stock Outstanding Additional Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Income Total Shareholders' Equity / (Deficit)

Shares Amount Shares Amount

Balance as of December 31, 2021 29,521,810 $ 480,631 2,106,934 $ — $ 21,711 $ ( 379,889 ) $ 3,261 $ ( 354,917 )

Retroactive application of recapitalization 99,626,583 — 7,110,226 1 ( 1 ) — — —

Adjusted balance, beginning of period 129,148,393 480,631 9,217,160 1 21,710 ( 379,889 ) 3,261 ( 354,917 )

Share-based compensation expense — — — — 2,527 — — 2,527

Repurchase of equity instruments — — — — ( 649 ) — — ( 649 )

Net loss — — — — — ( 76,356 ) — ( 76,356 )

Issuance of common stock upon exercise of options — — 1,204,891 — 1,194 — — 1,194

Transfer from foreign currency translation to investment — — — — — — 928 928

Foreign currency translation — — — — — — ( 1,449 ) ( 1,449 )

Balance as of December 31, 2022 129,148,393 $ 480,631 10,422,051 $ 1 $ 24,782 $ ( 456,245 ) $ 2,740 $ ( 428,722 )

See the accompanying Notes to the Consolidated Financial Statements.

LANZATECH GLOBAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Year Ended December 31, 2022 For the Period from January 28, 2021 (inception) through December 31, 2021

Year Ended December 31,

Cash Flows From Operating Activities:

Net income (loss) $ ( 1,358,446 ) $ 46,738

Adjustments to reconcile net income (loss) to net cash used in operating activities:

General and administrative expenses paid by Sponsor in exchange for issuance of Class B common stock — 1,000

Change in fair value of derivative warrant liabilities ( 2,969,630 ) ( 1,905,000 )

Gain from extinguishment of deferred underwriting commissions on public shares ( 171,700 )

Offering costs allocated to derivative warrant liabilities — 476,450

Income from investments held in the trust account ( 2,299,536 ) ( 6,015 )

Net loss $ ( 134,098 ) $ ( 76,356 )

Adjustments to reconcile net loss to net cash used in operating activities:

Share-based compensation expense 15,199 2,527

(Gain) loss on change in fair value of SAFE and warrant liabilities

( 14,471 ) 1,949

Loss on change in fair value of the FPA Put Option and the Fixed Maturity Consideration liabilities

Provision for losses on trade and other receivables 700 —

Depreciation of property, plant and equipment 5,452 4,660

Amortization of discount on debt security investment ( 1,301 ) —

Non-cash lease expense 1,526 1,825

Non-cash recognition of licensing revenue ( 1,805 ) ( 2,160 )

Loss (gain) from equity method investees, net 2,902 ( 1,992 )

Gain from disposal of property, plant and equipment

Net foreign exchange loss

Changes in operating assets and liabilities:

Prepaid expenses 331,701 155,454

Accounts payable 2,409,463 85,534

Due to related party 1,324,277 49,723

Accrued expenses 2,027,326 199,733

Capital base tax payable 196,182 198,129

Franchise tax payable ( 144,685 ) 188,237

Income tax payable 309,320

Accounts receivable, net 104 ( 8,817 )

Contract assets ( 10,049 ) ( 6,246 )

Accrued interest on debt investment ( 266 ) —

Other assets ( 2,658 ) ( 5,127 )

Accounts payable and accrued salaries and wages ( 4,991 ) 8,243

Contract liabilities 95 ( 488 )

Operating lease liabilities ( 337 ) ( 2,028 )

Other liabilities 2,220 ( 1,312 )

Net cash used in operating activities $ ( 97,296 ) $ ( 84,703 )

( 345,728 ) ( 510,017 )

Cash Flows From Investing Activities:

Cash deposited in trust account — ( 150,000,000 )

Investment income released from trust account for payment of taxes 9,000

Net cash provided by (used in) investing activities

9,000 ( 150,000,000 )

Purchase of property, plant and equipment ( 8,553 ) ( 10,735 )

Proceeds from disposal of property, plant and equipment

Purchase of debt securities ( 93,858 ) —

Proceeds from maturity of debt securities

Purchase of additional interest in equity method investment ( 288 ) —

Origination of related party loan ( 5,212 ) —

Net cash used in investing activities $ ( 57,911 ) $ ( 10,686 )

Cash Flows From Financing Activities:

Proceeds from note payable to related party — 1,000

Proceeds received from initial public offering, gross — 150,000,000

Proceeds received from private placement — 852,416

Proceeds from issue of equity instruments of the Company — 1,194

Proceeds from the Business Combination and PIPE, net of transaction expenses (Note 3) 213,381 —

Forward Purchase Agreement prepayment ( 60,096 )

Proceeds from exercise of options 2,550 —

Proceeds from issue of SAFE and warrant instruments

Repurchase of equity instruments of the Company ( 7,650 ) ( 649 )

Net cash provided by financing activities $ 148,185 $ 50,545

— 150,853,416

Net change in cash

( 336,728 ) 343,399

Cash – beginning of the period

Cash – end of the period

Net decrease in cash, cash equivalents and restricted cash

( 7,022 ) ( 44,844 )

Supplemental disclosure of noncash activities:

Offering costs paid by related party under note payable and advances $ — $ 1,968,784

Offering costs included in accrued expenses $ — $ 30,000

Offering costs paid by Sponsor in exchange for issuance of Class B common stock $ — $ 24,000

Prepaid expenses paid by related party under note payable and advances $ — $ 677,800

Repayment of note payable and advances by Sponsor in exchange for issuance of private placement warrants $ — $ 2,647,584

Deferred underwriting commissions in connection with the initial public offering $ — $ 5,250,000

Value of Class B common stock transferred to Anchor Investors at initial public offering $ — $ 6,509,758

Extinguishment of deferred underwriting commissions on public shares $ 4,878,300 $ —

The accompanying notes are an integral part of these consolidated financial statements.

LANZATECH GLOBAL, INC.

(FORMERLY KNOWN AS AMCI ACQUISITION CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 1 — Description of Organization and Business Operations

LanzaTech Global, Inc., formerly known as AMCI Acquisition Corp.

II prior to February 8, 2023 (the “Closing Date”) (the “Company”), was a blank check company incorporated as a Delaware corporation on January 28, 2021.

The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “business combination”).

Business Combination

On the Closing Date, the Company consummated the previously announced business combination pursuant to the terms of the Agreement and Plan of Merger (the “Closing”), dated as of March 8, 2022 (as amended on December 7, 2022, the “Merger Agreement”), by and among AMCI, AMCI Merger Sub, Inc., a Delaware corporation (“Merger Sub”) and LanzaTech NZ, Inc., a Delaware corporation (“Legacy LanzaTech”).

Pursuant to the Merger Agreement, on the Closing Date, (i) AMCI changed its name to “LanzaTech Global, Inc.” (“New LanzaTech”), and (ii) Merger Sub merged with and into Legacy LanzaTech, with Legacy LanzaTech as the surviving company in the Business Combination.

After giving effect to such Business Combination, Legacy LanzaTech became a wholly owned subsidiary of New LanzaTech.

Pursuant to the Merger Agreement, at the effective time of the Business Combination (the “Effective Time”), (i) each outstanding share of common stock of Legacy LanzaTech (the “Legacy LanzaTech common stock”) was converted into the right to receive 4.374677 shares of common stock, par value $ 0.0001 per share, of New LanzaTech (the “Common Stock”);

(ii) each warrant to purchase Legacy LanzaTech common stock that was outstanding and unexercised immediately prior to the Effective Time and would automatically be exercised or exchanged in full in accordance with its terms by virtue of the occurrence of the Business Combination, was automatically exercised or exchanged in full for the applicable shares of Legacy LanzaTech capital stock, and each such share of Legacy LanzaTech capital stock was treated as being issued and outstanding immediately prior to the Effective Time and was cancelled and converted into the right to receive the applicable shares of Common Stock;

(iii) each warrant to purchase Legacy LanzaTech common stock that was outstanding and unexercised prior to the Effective Time and was not automatically exercised in full as described in clause (ii) was converted into a warrant to purchase shares of Common Stock, in which case (a) the number of shares underlying such New LanzaTech warrant was determined by multiplying the number of shares of Legacy LanzaTech capital stock subject to such warrant immediately prior to the Effective Time, by 4.374677 and (b) the per share exercise price of such New LanzaTech warrant was determined by dividing the per share exercise price of such Legacy LanzaTech warrant immediately prior to the Effective Time by 4.374677 , except that in the case of a certain warrant issued by Legacy LanzaTech to ArcelorMittal XCarb S.à r.l on December 8, 2021, such exercise price is $ 10.00 ;

and (iv) to the extent not converted in full immediately prior to the Effective Time, the Brookfield SAFE was assumed by New LanzaTech and is convertible into 5,000,000 shares of Common Stock.

In addition, the accumulated dividends payable to the holders of Legacy LanzaTech preferred shares in connection with the share conversion based on the applicable conversion ratio at the Effective Time were settled by delivery of Common Stock.

Pursuant to the Merger Agreement, at the Effective Time, each Legacy LanzaTech option was converted into New LanzaTech options to purchase a number of shares of Common Stock (rounded down to the nearest whole share) equal to the product of (i) the number of Legacy LanzaTech common shares subject to such Legacy LanzaTech option multiplied by (ii) 4.374677 .

The exercise price of such New LanzaTech options is equal to the quotient of (a) the exercise price per share of such Legacy LanzaTech option in effect immediately prior to the Effective Time divided by (b) 4.374677 (and as so determined, this exercise price will be rounded up to the nearest full cent).

Pursuant to the Merger Agreement, at the Effective Time, each Legacy LanzaTech RSA that was outstanding immediately prior to the Effective Time was converted into a New LanzaTech RSA on the same terms and conditions as were applicable to such Legacy LanzaTech RSA immediately prior to the Effective Time, except that such New LanzaTech RSA will relate to a number of shares of Common Stock equal to the number of Legacy LanzaTech common shares subject to such Legacy LanzaTech RSA, multiplied by 4.374677 .

Cash, cash equivalents and restricted cash at beginning of period 83,710 128,732

Effects of currency translation on cash, cash equivalents and restricted cash ( 404 ) ( 178 )

Cash, cash equivalents and restricted cash at end of period $ 76,284 $ 83,710

Supplemental disclosure of non-cash investing and financing activities:

Acquisition of property, plant and equipment under accounts payable 279 246

Receipt of common shares as payment for option exercises

Right-of-use asset additions

Reclassification of capitalized costs related to the business combination to equity 1,514 —

Cashless conversion of warrants on preferred shares 5,890 —

Recognition of public and private warrant liabilities in the Business Combination 4,624 —

Reclassification of AM SAFE warrant to equity 1,800 —

Conversion of AM SAFE liability into common stock 29,730 —

Conversion of Legacy LanzaTech NZ, Inc.

preferred stock and in-kind dividend into common stock 722,160 —

Reclassification of Shortfall warrant to equity 3,063 —

LANZATECH GLOBAL, INC.

(FORMERLY KNOWN AS AMCI ACQUISITION CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Business Prior to the Business Combination

As of December 31, 2022, the Company has neither engaged in any operations nor generated any revenues.

All activity for the period from January 28, 2021 (inception) through December 31, 2022 relates to the Company’s formation and the initial public offering (“initial public offering”), described below.

The Company will not generate any operating revenues until after the completion of its initial business combination, at the earliest.

The Company will generate non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the initial public offering and from changes in the fair value of its derivative warrant liabilities, if applicable.

The Company’s sponsor is AMCI Sponsor II LLC, a Delaware limited liability company (the “Sponsor”).

The registration statement for the Company’s initial public offering was declared effective on August 3, 2021 (the “effective date”).

On August 6, 2021, the Company consummated its initial public offering (the “initial public offering”) of 15,000,000 units (the “units”).

Each unit consists of one Class A common stock of the Company, par value $ 0.0001 per share (the “Class A common stock”), and one-half of one redeemable warrant of the Company (the “warrant”), each whole warrant entitling the holder thereof to purchase one Class A common stock for $ 11.50 per share.

The units were sold at a price of $ 10.00 per unit, generating gross proceeds to the Company of $ 150,000,000 , which is discussed in Note 3.

Simultaneously with the closing of the initial public offering, the Company completed the private sale of an aggregate of 3,500,000 warrants (the “private placement warrants”) to the Sponsor at a purchase price of $ 1.00 per private placement warrant, generating gross proceeds to the Company of $ 3,500,000 .

The private placement warrants are identical to the warrants sold in the initial public offering, except that the private placement warrants, so long as they are held by the Sponsor or its permitted transferees, (i) are not redeemable by the Company, (ii) may not (including the Class A common stock issuable upon exercise of such private placement warrants), subject to certain limited exceptions, be transferred, assigned or sold by such holders until 30 days after the completion of the Company’s initial business combination, (iii) may be exercised by the holders on a cashless basis and (iv) will be entitled to registration rights.

No underwriting discounts or commissions were paid with respect to such sales.

As the initial public offering includes two instruments, Class A common stock and warrants, and as the warrants are classified as a financial liability, it is necessary to allocate the gross proceeds between Class A common stock and warrants.

The Company adopted the residual method to allocate the gross proceeds between Class A common stock and warrants based on their relative fair values.

The gross proceeds were first allocated to the fair value of the warrants and the residual amount was allocated to the Class A common stock.

The percentage derived from this allocation was used to allocate the deferred offering costs between Class A common stock and warrants.

Issuance costs allocated to the warrants were expensed to the Company’s statement of operations.

Transaction costs of the initial public offering amounted to $ 13,782,542 and consisted of $ 1,500,000 of underwriting discount, $ 5,250,000 of deferred underwriting discount, $ 6,509,758 in fair value of Class B common stock issued to Anchor Investors, and $ 522,784 of other offering costs.

A total of $ 150,000,000 was placed in a U.S.-based trust account maintained by Continental Stock Transfer & Trust Company, acting as trustee (the “trust account”).

The shares of common stock subject to redemption were recorded at a redemption value and classified as temporary equity upon the completion of the initial public offering, in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480, “Distinguishing Liabilities from Equity.” In such case, the Company will proceed with a business combination if the Company has net tangible assets of at least $ 5,000,001 upon such consummation of a business combination and, if the Company seeks stockholder approval, a majority of the issued and outstanding shares voted are voted in favor of the business combination.

CONSOLIDATED STATEMENTS OF CASH FLOWS

See the accompanying Notes to the Consolidated Financial Statements.

LANZATECH GLOBAL, INC.

(FORMERLY KNOWN AS AMCI ACQUISITION CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Emerging Growth Company Status

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”)) are required to comply with the new or revised financial accounting standards.

The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable.

The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.

This may make comparison of the Company’s consolidated financial statements with those of another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Risks and Uncertainties

Management is continuing to evaluate the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these consolidated financial statements.

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

On August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022 (the “ IR Act ”), which, among other things, imposes a new 1% U.S.

federal excise tax on certain repurchases of stock by “covered corporations” (which include publicly traded domestic (i.e., U.S.) corporations) beginning in 2023, with certain exceptions (the “ Excise Tax ”).

The Excise Tax is imposed on the repurchasing corporation itself, not its stockholders from which the stock is repurchased.

Because we are a Delaware corporation and our securities are trading on Nasdaq, we are a “covered corporation” for this purpose.

The amount of the Excise Tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase.

However, for purposes of calculating the Excise Tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year.

In addition, certain exceptions apply to the Excise Tax.

Department of the Treasury has authority to provide regulations and other guidance to carry out, and prevent the abuse or avoidance of the Excise Tax.

It is uncertain whether, and/or to what extent, the Excise Tax could apply to any repurchase by us of our common stock or in the event of our liquidation, in each instance after December 31, 2022, including any redemptions in connection with an initial business combination or in the event we do not consummate an initial business combination by August 6, 2023.

Liquidity and Capital Resources

As of December 31, 2022, the Company had approximately $ 7,000 in its operating bank account and a working capital deficit of approximately $ 5.9 million.

The Company’s liquidity needs up to December 31, 2022 have been satisfied through a contribution of $ 25,000 from the Sponsor to cover for certain offering costs in exchange for the issuance of Founder Shares, and a loan and advances from the Sponsor pursuant to the Note (as defined in Note 4).

Subsequent to the initial public offering, net

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

LANZATECH GLOBAL, INC.

(FORMERLY KNOWN AS AMCI ACQUISITION CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

proceeds from the private placement of $ 0.9 million were placed in the operating account for working capital purposes.

In addition, in order to finance transaction costs in connection with a business combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, provide the Company Working Capital Loans (as defined in Note 4).

On March 28, 2022, the Company entered into a noninterest-bearing Working Capital Loan with its Sponsor for the principal amount of up to $ 1.5 million.

As of December 31, 2022 and 2021, there were no amounts outstanding under any Working Capital Loan.

In connection with the execution of the Merger Agreement, AMCI entered into subscription agreements (as amended on December 7, 2022, the “Initial Subscription Agreements”) with certain investors (the “Initial PIPE Investors”).

AMCI entered into additional subscription agreements with certain institutional and accredited investors (the “PIPE Investors”) on October 8, 2022 (as amended on December 7, 2022) and February 6, 2022 (collectively, the “PIPE Subscription Agreements” and together with the subscription agreement between AMCI and ArcelorMittal, the “Subscription Agreements”).

Pursuant to the Subscription Agreements, the PIPE Investors purchased an aggregate of 18,500,000 shares of common stock in a private placement at a price of $ 10.00 per share for an aggregate purchase price of $ 185 million (the “PIPE Investment”).

Such aggregate number of shares and aggregate purchase price include 3,000,000 shares of common stock issued to ArcelorMittal pursuant to the AM SAFE with Legacy LanzaTech, as a result of which such PIPE Investor entered into a Subscription Agreement prior to the closing of the Business Combination.

The PIPE Investment was consummated in connection with the consummation of the Business Combination.

Upon closing of the Business Combination, the Company retained $ 153 million net of transaction expenses as working capital.

Upon closing of the Business Combination, the Company’s immediate sources of liquidity include cash generated from operations, accounts receivable, and existing credit facilities of LanzaTech.

Based on the foregoing, management believes that the Company will have sufficient working capital and borrowing capacity to meet its needs through one year from this filing.

Note 2 — Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the U.S.

Securities and Exchange Commission (the “SEC”).

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary.

All significant intercompany accounts and transactions have been eliminated in consolidation.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the Federal Deposit Insurance Corporation coverage limit of $ 250,000 .

As of December 31, 2022 and 2021, the Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.

Cash and Cash Equivalents

The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.

The Company had no cash equivalents as of December 31, 2022 and 2021.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 — Description of the Business

LanzaTech Global, Inc., formerly known as AMCI Acquisition Corp.

II (“AMCI”) prior to February 8, 2023 (the “Closing Date”) was incorporated as a Delaware corporation on January 28, 2021.

On March 8, 2022, LanzaTech NZ, Inc.

("Legacy LanzaTech") entered into an Agreement and Plan of Merger (the “Merger Agreement”) with AMCI and AMCI Merger Sub, Inc.

a Delaware corporation and a wholly owned subsidiary of AMCI (“Merger Sub”).

On February 8, 2023, Legacy LanzaTech completed its business combination with AMCI by which the Merger Sub merged with and into Legacy LanzaTech, with Legacy LanzaTech continuing as the surviving corporation and as a wholly owned subsidiary of AMCI (the “Business Combination”).

The reporting entity is LanzaTech Global, Inc.

and its subsidiaries (collectively referred to herein as “the Company”, "LanzaTech", “we”, “us”, “our”).

For more information on the Business Combination, see Note 3 - Reverse Recapitalization .

The Company is headquartered in Skokie, Illinois.

The Company is a nature-based carbon refining company that transforms waste carbon into the chemical building blocks for consumer goods such as sustainable fuels, fabrics, and packaging that people use in their daily lives.

The Company’s customers leverage its proven proprietary gas fermentation technology platform to convert certain feedstock, including waste carbon gases, into sustainable fuels and chemicals such as ethanol.

The Company performs related services such as feasibility studies, engineering services, and research and development ("R&D") in biotechnology for commercial and government entities.

The Company also purchases low carbon chemicals produced at customer facilities employing the Company’s technology and sells it under the brand name CarbonSmart.

We have also been developing the capabilities to produce single cell protein as a primary product from our gas fermentation platform.

As of December 31, 2023, licensees of the Company’s technology operate four commercial-scale waste-to-gas ethanol plants in China, one plant in India, and one plant in Belgium with others currently in development in various countries, compared to three commercial scale waste-to-gas ethanol plants in China as of December 31, 2022.

As a result of the Business Combination, the Company’s common stock trades under the ticker symbol “LNZA” and its Public Warrants trade under the ticker symbol “LNZAW” on the Nasdaq Stock Market.

Prior to the consummation of the Business Combination, the Company’s common shares were listed on Nasdaq Stock Market under the symbol “AMCI” and the Public Warrants were listed on the Nasdaq Stock Market under the symbol “AMCI-W”.

Unless otherwise indicated, amounts in these financial statements are presented in thousands, except for share and per share amounts.

Note 2 — Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”).

The consolidated financial statements include the accounts of LanzaTech Global, Inc.

and its wholly-owned consolidated subsidiaries.

All intercompany transactions and balances have been eliminated in consolidation.

Following the consummation of the Business Combination LanzaTech was a “smaller reporting company” or “SRC” as defined in Item 10(f)(1) of Regulation S-K.

Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements.

The market value of LanzaTech’s common stock that was held by non-affiliates (i.e.

public float) exceeded $700 million as of the last business day of the Company’s 2023 second fiscal quarter (the measurement date).

As a result, LanzaTech no longer qualified as a SRC as of the measurement date.

LanzaTech has elected to continue using the scaled disclosures permitted for SRCs in this annual report, and will begin providing non-scaled larger company disclosures in the Form 10-Q as of and for the period ended March 31, 2024.

The Business Combination is accounted for as a reverse recapitalization as Legacy LanzaTech was determined to be the accounting acquirer under Accounting Standards Codification (“ASC”) 805, Business Combinations (“ASC 805”) based on the evaluation of the following facts and circumstances:

• Legacy LanzaTech stockholders have the largest portion of voting rights ( 85.3 % at the closing of the Business Combination) in the Company;

• Legacy LanzaTech’s existing senior management team comprise senior management of the Company;

• The operations of the Company primarily represent operations of Legacy LanzaTech;

• In comparison with AMCI, Legacy LanzaTech has significantly more revenue and total assets.

For more information on the Business Combination, see Note 3 - Reverse Recapitalization .

The Company has reclassified its warrants on preferred shares, for $ 2,119 as of December 31, 2022, from Other accrued liabilities to Warrants on the consolidated balance sheet to conform with current period presentation.

Revision of previously issued financial statements

The Forward Purchase Agreement prepayment is presented as a cash outflow from financing activities within the consolidated statement of cash flows for the year ended December 31, 2023.

In the Company’s quarterly reports for the year-to-date periods ended March 31, 2023, June 30, 2023, and September 30, 2023, it was classified as a cash outflow from investing activities.

During Q4 2023, the company identified the error and updated the presentation in the annual financial statements.

The Company will revise this presentation in the 2023 comparative periods presented in its quarterly reports for the year-to-date periods ended March 31, 2024, June 30, 2024, and September 30, 2024 filed for the quarters.

The Company has determined the incorrect classification was not material to the respective quarterly reports.

Variable Interest Entity (“VIE”)

The Company makes judgments in determining whether an entity is a VIE and, if so, whether it is the primary beneficiary of the VIE and is thus required to consolidate the entity.

A VIE is a legal entity that has a total equity investment that is insufficient to finance its activities without additional subordinated financial support or whose equity investors lack the characteristics of a controlling financial interest.

The Company’s variable interest arises from contractual, ownership or other monetary interests in the entity, which changes with fluctuations in the fair value of the entity’s net assets.

A VIE is consolidated by its primary beneficiary, the party that has both the power to direct the activities that most significantly impact the VIE’s economic performance, and the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE.

The Company consolidates a VIE when the Company is deemed to be the primary beneficiary.

The Company assesses whether or not the Company is the primary beneficiary of a VIE on an ongoing basis.

If the Company is not deemed to be the primary beneficiary in a VIE, the Company accounts for the investment or other variable interests in a VIE in accordance with applicable US GAAP.

The Company holds interests in certain VIEs for which it has been determined the Company is not the primary beneficiary.

The Company's variable interests primarily relate to entities in which the Company has a non-controlling equity interest.

Although these financial arrangements resulted in holding variable interests in these entities, they do not empower the Company to direct the activities of the VIEs that most significantly impact the VIEs' economic performance.

The Company's interests in the VIEs are, therefore, accounted for under the equity method of accounting or at fair value (including, when applicable, the practicability exception to fair value under ASC 321-10-35).

Refer to Note 6 - Investments , for further information.

The Company is exposed to the VIEs’ losses and other impairment losses up to the carrying value of each investment and any amounts receivable from the VIE, less amounts payable.

Refer to Note 15 - Related Party Transactions , for further details on the transactions with VIEs.

Going Concern

The accompanying consolidated financial statements of the Company have been prepared in accordance with US GAAP and assuming the Company will continue as a going concern.

The going concern basis of presentation assumes that the Company will continue in operation one year after the date these financial statements are issued and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business.

The Company had cash and cash equivalents of $ 75,585 , short and long-term held-to-maturity debt investments of $ 45,159 and an accumulated deficit of $( 831,872 ) as of December 31, 2023 and cash outflows from operations of $( 97,296 ) and a net loss of $( 134,098 ) for the twelve months ended December 31, 2023.

As a result of the Business Combination described in Note 1 closing on February 8, 2023, the Company received $ 153,285 , which represents the proceeds from the Business Combination received net of (1) transaction expenses, (2) the PIPE investment and (3) the amount paid to ACM ARRT H LLC (“ACM”) and Vellar Opportunity Fund SPV LLC - Series 10 (“Vellar”) in relation to the Forward Purchase Agreement (see below).

The Company has historically funded its operations through debt financing and issuances of equity securities.

Based on the Company’s financial position as of the date the consolidated financial statements were issued, the Company projects that it will be able to cover its liquidity needs for the next twelve months.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of income and expenses during the reporting period.

Making estimates requires management to exercise significant judgment.

LANZATECH GLOBAL, INC.

(FORMERLY KNOWN AS AMCI ACQUISITION CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events.

Accordingly, the actual results could differ significantly from those estimates.

Investments Held in the Trust Account

The Company’s portfolio of investments is comprised of U.S.

government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, or investments in money market funds that invest in U.S.

government securities and generally have a readily determinable fair value, or a combination thereof.

When the Company’s investments held in the trust account are comprised of U.S.

government securities, the investments are classified as trading securities.

When the Company’s investments held in the trust account are comprised of money market funds, the investments are recognized at fair value.

Trading securities and investments in money market funds are presented on the consolidated balance sheets at fair value at the end of each reporting period.

Gains and losses resulting from the change in fair value of these securities is included in income on investments held in the trust account in the accompanying consolidated statements of operations.

The estimated fair values of investments held in the trust account are determined using available market information.

Financial Instruments

The fair value of the Company’s assets and liabilities which qualify as financial instruments under the FASB ASC 820, “Fair Value Measurement,” equal or approximate the carrying amounts represented in the consolidated balance sheets.

Fair Value Measurements

Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date.

GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value.

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

These tiers consist of:

• Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;

• Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active;

• Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy.

In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.

Offering Costs Associated with Initial Public Offering

Offering costs consisted of legal, accounting, underwriting fees and other costs incurred through the initial public offering that were directly related to the initial public offering.

Offering costs were allocated to the separable financial instruments issued in the initial public offering based on a relative fair value basis, compared to total proceeds received.

Offering costs associated with derivative warrant liabilities were expensed as incurred and presented as non-operating expenses in the statement of operations.

Offering costs associated with the Class A common stock issued were charged against the carrying value of the shares of Class A common stock upon the completion of the initial public offering.

The Company classifies deferred underwriting commissions as non-current

LANZATECH GLOBAL, INC.

(FORMERLY KNOWN AS AMCI ACQUISITION CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities.

Class A Common Shares Subject to Possible Redemption

The Company accounts for its Class A common stock subject to possible redemption in accordance with the guidance in ASC Topic 480, “Distinguishing Liabilities from Equity.” Class A common stock subject to mandatory redemption (if any) is classified as liability instruments and are measured at fair value.

Conditionally redeemable Class A common stock (including Class A common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity.

At all other times, Class A common stock is classified as stockholders’ equity.

The Company’s Class A common stock feature certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of uncertain future events.

Accordingly, as of the initial public offering, 15,000,000 shares of Class A common stock subject to possible redemption are presented at redemption value as temporary equity, outside of the stockholders’ equity (deficit) section of the Company’s consolidated balance sheets.

Under ASC 480-10-S99, the Company has elected to recognize changes in the redemption value immediately as they occur and adjust the carrying value of the security to equal the redemption value at the end of the reporting period.

This method would view the end of the reporting period as if it were also the redemption date of the security.

Effective with the closing of the initial public offering, the Company recognized the accretion from initial book value to redemption amount, which resulted in charges against additional paid-in capital (to the extent available) and accumulated deficit.

Derivative Financial Instruments

The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks.

The Company evaluates all of its financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 and FASB ASC Topic 815, “Derivatives and Hedging” (“ASC 815”).

The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.

The public warrants and the private placement warrants are recognized as derivative liabilities in accordance with ASC 815.

Accordingly, the Company recognizes the warrant instruments as liabilities at fair value and adjusts the carrying value of the instruments to fair value at each reporting period until they are exercised.

The initial fair value of the public warrants issued in connection with the initial public offering was estimated using a Monte-Carlo simulation model and the initial fair value of the private placement warrants was estimated using a Black-Scholes option pricing model.

The fair value of the public warrants as of December 31, 2022 and 2021 is based on observable listed prices for such warrants.

The fair value of the private placement warrants as of December 31, 2022 and 2021 is determined using a Black-Scholes option pricing model.

The determination of the fair value of the warrant liability may be subject to change as more current information becomes available and, accordingly, the actual results could differ significantly.

Derivative warrant liabilities are classified as non-current liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities.

The Company follows the asset and liability method of accounting for income taxes under FASB ASC Topic 740, “Income Taxes” (“ASC 740”).

Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period.

Significant estimates include fair value of equity awards granted to both employees and non-employees, valuation of common stock prior to the close of the Business Combination, revenue recognized over time, AM SAFE and Brookfield SAFE obligations, AM SAFE warrants, the Forward Purchase Agreement and the Private Placement Warrants.

The Company uses the percentage of completion for the input method to recognize revenue over time for certain contracts with customers.

Under the input method, the Company exercises judgment and estimation when selecting the most indicative measure of such performance.

Most of our arrangements provide fixed consideration, however, when there are variable consideration elements, the Company estimates the transaction price and whether revenue should be constrained.

Significant estimates and judgments are also used when a material right is provided to the customer.

In these instances, the Company estimates the stand-alone selling price and apportions the total transaction price to this material right.

Refer to the Revenue Recognition section in Note 2 - Summary of Significant Accounting Policies hereunder.

Changes in facts and circumstances or additional information may result in revised estimates, and actual results may differ from these estimates.

Segment Information

The Company operates as one operating segment.

Operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker (“CODM”), in deciding how to allocate resources and assess performance.

While the Company offers a variety of services and operates in multiple countries, the Company’s business operates in one operating segment because most of the Company’s service offerings are delivered and supported on a global basis, most of the Company’s service offerings are deployed in a similar way, and the Company’s CODM evaluates the Company’s financial information and resources and assesses the performance of these resources on a consolidated basis.

There are no segment managers who are held accountable by the CODM, or anyone else, for operations, operating results, and planning for components below the consolidated level.

Accordingly, the Company has determined that it has a single reportable and operating segment.

See Note 5 - Revenues , for disaggregation of the Company’s revenues by customer location and contract type.

Foreign Currencies

The Company’s reporting currency is the U.S.

The Company has certain foreign subsidiaries where the functional currency is the local currency.

All of the assets and liabilities of these subsidiaries are translated to U.S.

dollars at the exchange rate in effect at the balance sheet date, income and expense accounts are translated at average rates for the period, and shareholders’ equity accounts are translated at historical rates.

The effects of translating financial statements of foreign operations into the Company’s reporting currency are recognized in other comprehensive income.

The Company also has foreign subsidiaries that have a functional currency of the U.S.

Purchases and sales of assets and income and expense items denominated in foreign currencies are remeasured into U.S.

dollar amounts on the respective dates of such transactions.

Net realized and unrealized foreign currency gains or losses relating to the differences between these recorded amounts and the U.S.

dollar equivalent actually received or paid are included within other expense, net in the consolidated statements of operations and comprehensive loss.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less at the time of purchase to be cash equivalents.

As of December 31, 2023 and December 31, 2022 , the Company had $ 75,585 and $ 83,045 of cash and cash equivalents, respectively.

Restricted Cash

The Company is required to maintain a cash deposit with a bank which consists of collateral on certain travel and expense programs maintained by the bank.

The following represents a reconciliation of Cash and cash equivalents in the

consolidated balance sheets to total cash, cash equivalents and restricted cash in the consolidated statements of cash flows as of December 31, 2023 and December 31, 2022.

December 31, 2023 December 31, 2022

Cash and cash equivalents $ 75,585 $ 83,045

Restricted cash (presented within Other current assets) 699 665

Cash, cash equivalents and restricted cash $ 76,284 $ 83,710

Trade and Other Receivables

Receivables are reported net of allowances for doubtful accounts.

The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of customers to make required payments.

The Company estimates the allowance for doubtful accounts based on a variety of factors including the length of time receivables are past due, the financial health of customers, unusual macroeconomic conditions, and historical experience.

As of December 31, 2023 and December 31, 2022, the Company recognized an allowance for doubtful accounts of $ 1,751 and $ 1,051 , respectively.

Other Current Assets

Other current assets consist of prepaid expenses, materials and supplies, inventory and other assets.

Material and supplies consist of spare parts and consumables used for research and research equipment and is stated at the weighted average cost.

Inventory consists of CarbonSmart products and biocatalysts to be sold to biorefining customers.

Property, Plant and Equipment, net

Property, plant and equipment are stated at cost and include improvements that significantly increase capacities or extend the useful lives of existing plant and equipment.

Depreciation is calculated using the straight-line method over the estimated useful life of the assets.

Useful lives range from three to five years for instruments and equipment, three to five years for office equipment and furniture and software, five years for vehicles and, for leasehold improvements, the shorter of the life of the improvement or the remaining term of the lease.

The Company reviews the remaining useful life of its assets on a regular basis to determine whether changes have taken place that would suggest that a change to depreciation policies is warranted.

Upon retirement or disposal of property, plant and equipment, the cost and related accumulated depreciation are removed from the account, and the resulting gains or losses, if any, are recorded in the consolidated statements of operations and comprehensive loss.

Net gains or losses related to asset dispositions are recognized in earnings in the period in which dispositions occur.

Routine maintenance, repairs and replacements are expensed as incurred.

The Company determines if an arrangement is a lease at inception.

Lease agreements under which the Company is a lessee are evaluated to classify the lease as a finance or operating lease.

Operating lease assets and liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term.

Lease assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease.

As most leases do not provide an implicit interest rate, the Company uses its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments.

Leases with an initial term of 12 months or less are not recorded on the Company’s consolidated balance sheets.

The Company recognizes lease expense for these leases on a straight-line basis over the lease term.

The Company accounts for lease components and non-lease components as a single lease component.

Impairment of Long-Lived Assets

The Company performs a recoverability assessment of each of its long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Indicators may include, but are not limited to, adverse changes in the regulatory environment in a jurisdiction where the Company operates, a decision to discontinue the development of a long-lived asset, early termination of a significant customer contract, or the introduction of newer technology.

When performing a recoverability assessment, the Company measures whether the estimated future undiscounted net cash flows expected to be generated by the asset exceeds its carrying value.

In the event that an asset does not meet the recoverability test, the carrying value of the asset will be adjusted to fair value resulting in an impairment charge.

Management develops the assumptions used in the recoverability assessment based on active contracts as well as information received from third-party industry sources.

The Company did not record an impairment during the years ended December 31, 2023 and 2022.

Equity Method Investments

Investments in entities over which the Company has significant influence, but not control, are accounted for using the equity method of accounting.

Gain or loss from equity method investees, net, represents the Company’s proportionate share of net income or loss of its equity method investees and any gains or losses resulting from transactions in the investee's equity.

Our equity method investment is assessed for impairment whenever changes in the facts and circumstances indicate a loss in value may have occurred.

When a loss is deemed to have occurred and is other than temporary, the carrying value of the equity method investment is written down to fair value.

In evaluating whether a loss is other than temporary, the Company considers the length of time for which the conditions have existed and its intent and ability to hold the investment.

Equity Security Investments

Investments in entities over which the Company has neither significant influence, nor control, are accounted for as equity security investments.

For investments where the fair value is not readily determinable, the Company will account for its investment using the alternative measurement principals as permitted under Accounting Standards Codification ("ASC") 321, Investments — Equity Securities .

Subsequently, under the alternative measurement method, the Company will adjust the carrying value for observable changes in price and will reassess whether its investment continues to qualify for such method.

Additionally, the Company will perform a qualitative assessment and recognize an impairment if there are sufficient indicators that the fair value of the investment is less than its carrying value.

The changes in value and impairment charges (if any), are recorded in Other expense, net in the consolidated statements of operations and comprehensive loss.

ArcelorMittal Simple Agreement for Future Equity ("AM SAFE")

In December 2021, the Company issued a SAFE that allowed an investor to participate in future equity financings through a share-settled redemption of the amount invested (such notional being the “invested amount”).

The Company determined that the AM SAFE was not legal form debt (i.e., no creditors’ rights).

The AM SAFE includes a provision allowing for cash redemption upon the occurrence of a change of control, the occurrence of which is outside the control of the Company.

Therefore, the AM SAFE was classified as mark-to-market liability pursuant to ASC 480, Distinguishing Liability from Equity ("ASC 480") as of December 31, 2022.

On the Closing Date of the Business Combination, the AM SAFE converted into 3,000,000 shares of common stock.

The AM SAFE was adjusted to its fair value on the Closing Date prior to settlement.

Brookfield SAFE

On October 2, 2022, the Company entered into a SAFE with Brookfield (the "Brookfield SAFE").

Under the Brookfield SAFE, the Company agreed to issue to Brookfield the right to certain shares of its capital stock, in exchange for the payment of $ 50,000 (the “Initial Purchase Amount”).

The Brookfield SAFE is legal form debt.

Management has elected to apply the Fair Value Option ("FVO") under ASC 825, Financial Instruments .

As the Brookfield SAFE is accounted for under the FVO, the Brookfield SAFE is classified as mark-to-market liability.

Investment securities

The Company classifies investment securities according to their purpose and holding period.

All investment securities are debt securities that have been classified as held-to-maturity (“HTM”) because the Company has both the ability and intent to hold the securities to maturity.

HTM debt securities are comprised of U.S.

Treasury bills, U.S.

Treasury notes, Yankee bonds, and corporate debt.

HTM debt securities are carried at amortized cost, which is original cost net of periodic principal repayments and amortization of premiums and accretion of discounts.

Accrued interest receivable is recorded within trade and other

receivables, net of allowance on the consolidated balance sheets.

Amortization of premiums and accretion of discounts are computed using the contractual level-yield method (contractual interest method), adjusted for actual prepayments.

The contractual interest method recognizes the income effects of premiums and discounts over the contractual life of the securities based on the actual behavior of the underlying assets, including adjustments for actual prepayment activities, and reflects the contractual terms of the securities without regard to changes in estimated prepayments based on assumptions about future borrower behavior.

Held-to-maturity securities are evaluated individually on a quarterly basis for expected credit losses.

If applicable, an allowance for credit losses is recorded with a corresponding credit loss expense (or reversal of credit loss expense).

The allowance for credit losses excludes uncollectible accrued interest receivable, which is measured separately.

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity (“ASC 815-40”).

The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815-40, including whether the warrants are indexed to the Company’s own common stock, among other conditions for equity classification.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded at fair value as a component of additional paid-in capital at the time of issuance.

For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance and adjusted to the current fair value at each balance sheet date thereafter.

Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss in Other expense, net on the consolidated statements of operations and comprehensive loss (see Note 8 - Warrants ).

Forward Purchase Agreement

On February 3, 2023, the Company entered into a Forward Purchase Agreement (“FPA”) with ACM .

On the same date, ACM partially assigned its rights under the FPA to Vellar.

ACM and Vellar are together referred to as the “Purchasers”.

Pursuant to the Forward Purchase Agreement, the Purchasers obtained 5,916,514 common shares (“Recycled Shares”) on the open market for $ 10.16 per share (“Redemption Price”), and such purchase price of $ 60,096 was funded by the use of AMCI trust account proceeds as a partial prepayment (“Prepayment Amount”) for the Forward Purchase Agreement redemption 3 years from the date of the Business Combination (“Maturity Date”).

The Maturity Date may be accelerated, at the Purchasers discretion, if the Company share price trades below $ 3.00 per share for any 50 trading days during a 60 day consecutive trading-day period or the Company is delisted.

On any date following the Business Combination, the Purchasers also have the option to early terminate the arrangement in whole or in part by providing optional early termination notice to the Company (the “Optional Early Termination”).

For those shares early terminated (the “Terminated Shares”), the Purchasers will owe the Company an amount equal to the Terminated Shares times the Redemption Price, which may be reduced in the case of certain dilutive events (“Reset Price”).

At the Maturity Date, the Company is obligated to pay the Purchasers an amount equal to the product of (1) 7,500,000 less (b) the number of Terminated Shares multiplied by (2) $ 2.00 (the “Maturity Consideration”).

In addition to the Maturity Consideration, on the Maturity Date, the Company shall pay to the Purchasers an amount equal to the product of (x) 500,000 and (y) the Redemption Price, totaling $ 5,079 (the “Share Consideration”).

If the Purchasers were to utilize their Optional Early Termination to terminate the FPA early in its entirety, neither the Maturity Consideration nor the Share Consideration would be due to the Purchasers.

The Purchasers’ Optional Early Termination economically results in the prepaid forward contract being akin to a written put option with the Purchaser’s right to sell all or a portion of the 5,916,514 common shares to the Company.

The Company is entitled over the 36-month maturity period to either a return of the prepayment or the underlying shares, which the Purchasers will determine at their sole discretion.

The FPA consists of three freestanding financial instruments which are accounted for as follows:

1) The total prepayment of $ 60,547 (“Prepayment Amount”), which is accounted for as a reduction to equity to reflect the substance of the overall arrangement as a net repurchase of the Recycled Shares and sale of shares to the Purchasers pursuant to a subscription agreement.

2) The “FPA Put Option” which includes both the in-substance written put option and the portion of the Maturity Consideration in excess of the Minimum Maturity Consideration (the “Variable Maturity Consideration”).

The FPA Put Option is a derivative instrument the Company has recorded as a liability and measured at fair value.

The initial fair value of the FPA Put Option and subsequent changes in fair value of the FPA Put Option are recorded within Other expense, net on the consolidated statements of operations and comprehensive loss.

3) The “Fixed Maturity Consideration,” which includes the minimum portion of the Maturity Consideration (the “Minimum Maturity Consideration”), calculated as 7,500,000 less 5,916,513 multiplied by $ 2.00 or $ 3,167 , and the Share Consideration.

Both the Minimum Maturity Consideration and the Share Consideration are considered to be free-standing debt instruments and as both will be paid on the same terms and at the same time, these are accounted for together.

The Company has elected to measure these using the FVO under ASC 825, Financial Instruments (“ASC 825”).

The Fixed Maturity Consideration is recorded as a long-term liability on the consolidated balance sheets.

The initial fair value of the Fixed Maturity Consideration and subsequent changes in fair value of the Fixed Maturity Consideration are recorded within Other expense, net on the consolidated statements of operations and comprehensive loss.

Revenue Recognition

The Company recognizes revenue from exchange transactions in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”).

The Company primarily earns revenue from services related to biorefining (formerly known as carbon capture and transformation) which includes feasibility studies and basic engineering design of commercial plants, licensing of technologies and sales of biocatalysts.

The other two revenue streams are:

Revenue is measured based on the consideration specified in a contract with a customer.

The Company records taxes collected from customers and remitted to governmental authorities on a net basis.

The Company’s payment terms are between 30-60 days and can vary by customer type and products offered.

Management has evaluated the terms of the Company’s arrangements and determined that they do not contain significant financing components.

The Company provides feasibility studies and basic design and engineering services used for detailed design, procurement, and construction of commercial plants that utilize the Company’s technologies, along with the sale of microbes and media.

The services provided are recognized as a performance obligation satisfied over time.

Revenue is recognized using the cost-to-cost input method for certain engineering services, or the percentage of completion method as performance obligations are satisfied.

Revenue for the sale of microbes and media is at a point in time, depending on when control transfers to the customer.

The Company licenses intellectual property to generate recurring revenue, in the case of running royalties, or one-time revenue, in the case of fixed consideration royalties, when its customers deploy the Company’s technology in their biorefining plants.

When licenses are considered to be distinct performance obligations, the recognition of revenue is dependent on the terms of the contract, which may include fixed consideration or royalties based on sales or usage, in which case the revenue is recognized when the subsequent sale or usage occurs or when the performance obligation to which some or all of the sales or usage-based royalty is allocated has been satisfied, whichever is later.

Grants received to perform engineering services, including cost reimbursement agreements, are assessed to determine if the agreement should be accounted for as an exchange transaction or a contribution.

An agreement is accounted for as a contribution if the resource provider does not receive commensurate value in return for the assets transferred.

Contributions are recognized as grant revenue as the qualifying costs related to the grant have been incurred.

Joint Development and Contract Research

The Company performs R&D services related to novel technologies and development of biocatalysts for commercial applications, mainly to produce fuels and chemicals.

The Company engages in two main types of R&D services – joint development agreements, and contract research, including projects with the U.S.

Department of Energy and other US or foreign government agencies.

Such services are recognized as a performance obligation satisfied over time.

Revenue is recognized based on milestone completion, when payments are contingent upon the achievement of such milestones, or based on percentage-completion method when enforceable rights to payment exist.

When no milestones or phases are clearly defined, management has determined that the cost incurred, input method, is an appropriate measure of progress

towards complete satisfaction of the performance obligations under ASC 606 , and estimates its variable consideration under the expected value method.

Revenue is not recognized in advance of customer acceptance of a milestone when such acceptance is contractually required.

Payments for R&D services with no contractual payments are not due from customers until a technical report is submitted;

therefore, a contract asset is recognized at milestone completion but prior to the submission of a technical report.

The contract asset represents the Company’s right to consideration for the services performed at milestone completion.

Occasionally, customers provide payments in advance of the Company providing services which creates a contract liability for the Company.

The contract liability represents the Company's obligation to provide services to a customer.

The Company purchases chemical building blocks from the customers who have deployed our proprietary technologies in their biorefining plants and sells them as CarbonSmart products.

Revenue is recognized at a point in time when control transfers to our end customer, which varies depending on the shipping terms.

The Company acts as the principal in such transactions and accordingly, recognizes revenue and cost of revenues on a gross basis.

Amounts received for sales of CarbonSmart products are classified as Revenue from sales of CarbonSmart products in the consolidated statements of operations and comprehensive loss.

Collaboration Arrangements

The Company has certain partnership agreements that are within the scope of ASC 808, Collaborative Arrangements , which provides guidance on the presentation and disclosure of collaborative arrangements.

Generally, the classification of the transaction under the collaborative arrangements is determined based on the nature of the contractual terms of the arrangement, along with the nature of the operations of the participants.

The Company’s collaborative agreements generally include a provision of R&D services related to novel technologies and biocatalysts.

Amounts received for these services are classified as Revenue from collaborative arrangements in the consolidated statements of operations and comprehensive loss.

The Company's R&D services are a major part of the Company's ongoing operations and therefore ASC 606 is applied to recognize revenue.

Cost of Revenues

The Company’s R&D, engineering, and other direct costs of services and goods related to revenue agreements with customers, related parties, and collaborative partners represent cost of revenue.

Costs include both internal and third-party fixed and variable costs and include materials, supplies, labor, and fringe benefits.

Research and Development

We incur costs associated with various R&D activities and expense them as incurred.

Fair Value of Financial Instruments

Fair value is defined as the exchange price that would be received for an asset or an exit price paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs.

The fair value hierarchy defines a three-level valuation hierarchy for disclosure of fair value measurements as follows:

Level 1 — Valuations based on quoted prices in active markets for identical assets or liabilities that an entity has the ability to access;

Level 2 — Valuations based on quoted prices for similar assets or liabilities, quoted prices for identical assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities;

Level 3 — Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC 820, Fair Value Measurement , approximates the carrying amounts represented in the accompanying consolidated balance sheets, primarily due to their short-term nature, except for the warrant liability.

Concentration of Credit Risk and Other Risks and Uncertainties

Revenue generated from the Company’s contracting entities outside of the United States for the twelve months ended December 31, 2023 and 2022 was approximately 73 % and 61 %, respectively.

As of December 31, 2023 and December 31, 2022, approximately 49 % and 35 %, respectively, of trade accounts receivable and unbilled accounts receivable were due from contracting entities located outside the United States.

As of December 31, 2023 and December 31, 2022, the value of property, plant, and equipment outside the United States was immaterial.

The Company’s revenue by geographic region based on the contracting entities’ location is presented in Note 5 - Revenues .

Our largest c ontracting entities represent 10% or greater of revenue and were as follows for the twelve months ended months ended December 31, 2023 and 2022:

Year Ended December 31,

Customer A 38 % 10 %

Customer B 6 % 22 %

Stock-Based Compensation

In exchange for certain employee and director services, compensation is given in the form of equity-based awards.

The Company accounts for equity-based compensation in accordance with ASC 718, Compensation – Stock Compensation.

Accordingly, equity-classified awards are recorded based on the grant date fair value and expensed over the requisite service period for the respective award.

Liability-classified awards are remeasured at the end of each reporting period and expensed based on the percentage of requisite service that has been rendered.

The Company’s equity-based awards include stock option awards, restricted stock units, stock-appreciation rights (“SARs”) and restricted stock issued by the Company, which vest based on either time and/or the achievement of certain market or performance conditions.

The Company records forfeitures as they occur.

Compensation expense is recognized in the Company’s consolidated statements of operations and comprehensive loss, primarily within research and development expenses.

For awards with only service conditions that have a graded vesting schedule, the Company recognizes compensation cost on a straight-line basis over the requisite service period for the entire award.

For awards with market or performance conditions that have a graded vesting schedule, the Company recognizes compensation cost on a straight-line basis over the requisite service period for each tranche of the award.

Compensation expense resulting from performance awards is recognized over the requisite service period when it is probable that the performance condition will be met.

The recognized compensation expense for performance awards is adjusted based on an estimate of awards ultimately expected to vest.

The Company estimates the fair value of service and performance-based options and SARs using a Black-Scholes option pricing model that uses assumptions including expected volatility, expected term, and the expected risk-free rate of return.

The Company estimates the fair value of market-based RSUs using the Monte Carlo simulation model that uses assumptions including expected volatility, and the derived service period.

The Company uses peer data to determine expected volatility and expected term.

The Company estimates the fair value of RSUs based on the closing market price of its common stock on the date of measurement.

Benefit Plans

The Company sponsors a 401(k) defined contribution retirement plan for the benefit of its employees, substantially all of whom are eligible to participate after meeting minimum qualifying requirements.

Contributions to the plan are at the discretion of the Company.

For the years ended December 31, 2023 and 2022, the Company contributed $ 1,253 and $ 987 ,

respectively, to the plan, which contributions are included within Cost of revenue, Research and development expense and Selling, general and administrative expense in the consolidated statements of operations and comprehensive loss.

The Company follows the asset and liability method of accounting for income taxes under ASC 740, Income Taxes .

Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

1 unchanged sentence

Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

LANZATECH GLOBAL, INC.

(FORMERLY KNOWN AS AMCI ACQUISITION CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return.

For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities.

ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in period, disclosure and transition.

The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense.

The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.

The Company is subject to income tax examinations by major taxing authorities since inception.

Net Income (Loss) Per Share of Common Stock

The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” Prior to the closing of the Business Combination, the Company had two classes of shares, which are referred to as Class A common stock and Class B common stock.

Income and losses are shared pro rata between the two classes of shares.

Net income (loss) per common share is calculated by dividing the net income (loss) by the weighted average shares of common stock outstanding for the respective period.

The calculation of diluted net income (loss) does not consider the effect of the warrants underlying the units sold in the initial public offering and the private placement warrants to purchase an aggregate of 11,000,000 shares of Class A common stock in the calculation of diluted income (loss) per share, because their exercise is contingent upon future events and their inclusion would be anti-dilutive under the treasury stock method.

As a result, diluted net income (loss) per share is the same as basic net income (loss) per share for the year ended December 31, 2022 and for the period from January 28, 2021 (inception) through December 31, 2021.

Accretion associated with the redeemable Class A common stock is excluded from earnings per share as the redemption value approximates fair value.

The following table reflects presents a reconciliation of the numerator and denominator used to compute basic and diluted net income (loss) per share for each class of common stock:

For the Year Ended December 31, 2022 For the period from January 28, 2021

(inception) through December 31, 2021

Class A Class B Class A Class B

Basic and diluted net income (loss) per common share:

Allocation of net income (loss) $ ( 1,086,757 ) $ ( 271,689 ) $ 25,974 $ 20,764

Basic and diluted weighted average common shares outstanding 15,000,000 3,750,000 4,690,909 3,750,000

Basic and diluted net income (loss) per common share $ ( 0.07 ) $ ( 0.07 ) $ 0.01 $ 0.01

Recent Accounting Pronouncements

In June 2022, the FASB issued ASU 2022-03, ASC Subtopic 820 “Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”.

The ASU amends ASC 820 to clarify that a contractual sales restriction is not considered in measuring an equity security at fair value and to introduce new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value.

The ASU applies to both holders and issuers of equity and equity-linked securities measured at fair value.

The amendments in this ASU are effective for the Company in fiscal years beginning after December 15, 2023, and interim periods within those fiscal years.

Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance.

The Company is still evaluating the impact of this pronouncement on the consolidated financial statements.

LANZATECH GLOBAL, INC.

(FORMERLY KNOWN AS AMCI ACQUISITION CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The Company’s management does not believe that any other recently issued, but not yet effective, accounting standards updates, if currently adopted, would have a material effect on the Company’s consolidated financial statements.

Note 3 — Initial Public Offering

On August 6, 2021, the Company consummated its initial public offering of 15,000,000 units, at an offering price of $ 10.00 per unit, generating gross proceeds of $ 150.0 million, and incurring offering costs of approximately $ 13.8 million, inclusive of $ 1.5 million of underwriting discount, approximately $ 5.3 million in deferred underwriting commissions, approximately $ 6.5 million in fair value of Class B common stock issued to Anchor Investors, and approximately $ 0.5 million in other offering costs.

Each whole warrant entitles the holder to purchase one share of Class A common stock at a price of $ 11.50 per share, subject to adjustment (see Note 8).

Certain qualified institutional buyers or institutional accredited investors (the “Anchor Investors”) purchased 15,480,000 units in the initial public offering.

None of the Anchor Investors are affiliated with any member of the Company’s management.

The underwriters had a 45-day option from the date of the underwriting agreement (August 3, 2021) to purchase up to an additional 2,250,000 units to cover over-allotments.

On September 17, 2021, the over-allotment option expired unexercised, resulting in 562,500 shares of Class B common stock that were subject to forfeiture to be forfeited.

Note 4 — Related Party Transactions

Founder Shares

On January 29, 2021, the Sponsor paid $ 25,000 , or approximately $ 0.005 per share, to cover certain offering costs in consideration for 5,031,250 shares of Class B common stock, par value $ 0.0001 .

In March 2021, the Sponsor transferred all of the founder shares it held to members of the Company’s board of directors, management team, and persons or entities affiliated with AMCI Group (the “initial shareholders”).

Such shares were fully paid.

On May 14, 2021, the Sponsor surrendered 718,750 founder shares to the Company for no consideration, resulting in the Sponsor owning 4,312,500 founder shares.

Up to 562,500 of the founder shares will be forfeited depending on the extent to which the underwriters’ over-allotment is exercised.

On September 17, 2021, the over-allotment option expired unexercised, resulting in 562,500 of the founder shares being forfeited.

In exchange for the Anchor Investors’ participation in the initial public offering as described in Note 3, the Sponsor sold a total of 780,000 founder shares to the Anchor Investors.

The Company determined that the fair value of these founder shares was approximately $ 6.5 million (or approximately $ 8.35 per share) using a Monte Carlo simulation.

The Company recognized the excess fair value of these founder shares, over the price sold to the Anchor Investors, as an expense of the initial public offering resulting in a charge against the carrying value of Class A common stock subject to possible redemption.

The initial stockholders have agreed not to transfer, assign or sell any of their founder shares and any Class A common stocks issuable upon conversion thereof until the earlier to occur of:

(A) one year after the completion of the initial business combination and (B) the date on which the Company completes a liquidation, merger, capital stock exchange or other similar transaction after the Company’s initial business combination that results in all of the Company’s stockholders having the right to exchange their Class A common stock for cash, securities or other property;

except to certain permitted transferees and under certain circumstances (the “Lock-up”).

Any permitted transferees will be subject to the same restrictions and other agreements of the company’s initial stockholders with respect to any founder shares.

Notwithstanding the foregoing, the founder shares will be released from the Lock-up if the closing price of the Company’s Class A common stock equals or exceeds $ 12.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30 -trading day period commencing at least 150 days after the company’s initial business combination.

LANZATECH GLOBAL, INC.

(FORMERLY KNOWN AS AMCI ACQUISITION CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Private Placement

Simultaneously with the closing of the initial public offering, the Company’s Sponsor has purchased an aggregate of 3,500,000 private placement warrants, each exercisable to purchase one Class A common stock at $ 11.50 per share, at a price of $ 1.00 per warrant, or $ 3,500,000 in the aggregate.

The private placement warrants will not be redeemable by the Company so long as they are held by the initial purchasers or their permitted transferees.

The initial purchasers, or their permitted transferees, have the option to exercise the private placement warrants on a cashless basis.

If the private placement warrants are held by holders other than initial purchasers or their permitted transferees, the private placement warrants will be redeemable by the Company and exercisable by the holders on the same basis as the warrants included in the units being sold in the initial public offering.

Otherwise, the private placement warrants have terms and provisions that are identical to those of the warrants being sold as part of the units in the initial public offering.

If the private placement warrants are held by holders other than the Sponsor or its permitted transferees, the private placement warrants will be redeemable by the Company in all redemption scenarios and exercisable by the holders on the same basis as the warrants included in the units being sold in the initial public offering.

Related Party Loans and Advances

On January 29, 2021, the Sponsor agreed to loan the Company up to $ 300,000 to be used for a portion of the expenses of the initial public offering (“Note”).

This loan was non-interest bearing, unsecured and payable upon the closing of the initial public offering.

In addition to the Note, the Sponsor of the Company also paid certain administrative expenses and offering costs on behalf of the Company.

These advances were due on demand and were non-interest bearing.

The Company repaid the note payable and advances in exchange for the issuance of private placement warrants.

In addition, in order to finance transaction costs in connection with an intended business combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required on a non-interest basis (“Working Capital Loans”).

If the Company completes the initial business combination, it will repay the Working Capital Loans.

In the event that the initial business combination does not close, the Company may use a portion of the working capital held outside the trust account to repay the Working Capital Loans but no proceeds from the trust account would be used to repay the Working Capital Loans.

Up to $ 1,500,000 of such Working Capital Loans may be convertible into warrants of the post-business combination entity at a price of $ 1.00 per warrant at the option of the lender.

Such warrants would be identical to the private placement warrants.

Except as set forth above, the terms of Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans.

As of December 31, 2022 and 2021, the Company had no borrowings under the Working Capital Loans.

Administrative Service Fee and Reimbursements

Subsequent to the closing of the initial public offering, the Company will pay its Sponsor $ 10,000 per month for office space, secretarial and administrative services provided to members of the management team.

Upon completion of the initial business combination or the Company’s liquidation, the Company will cease paying these monthly fees.

For the year ended December 31, 2022 and for the period from January 28, 2021 (inception) through December 31, 2021, the Company incurred $ 120,000 and $ 50,000 of such fees, respectively, included as general and administrative fees — related party on the accompanying statements of operations.

As of December 31, 2022 and 2021, approximately $ 120,000 and $ 50,000 , respectively, of such fees are included as due to related party on the accompanying consolidated balance sheets.

The Sponsor, officers and directors, or any of their respective affiliates will be reimbursed for any out-of-pocket expenses incurred in connection with activities on the Company’s behalf such as identifying potential target businesses and performing due diligence on suitable business combinations.

The Company’s audit committee will review on a quarterly basis all payments that were made by the Company to the Sponsor, directors, officers or directors of the Company, or any of their affiliates.

As of December 31, 2022 and 2021, there were approximately

LANZATECH GLOBAL, INC.

(FORMERLY KNOWN AS AMCI ACQUISITION CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

$ 1.4 million and $ 0 , respectively, of such fees included as due to related party on the accompanying consolidated balance sheets.

Note 5 — Commitments and Contingencies

Registration Rights

Prior to the consummation of the Business Combination, the holders of the (i) founder shares, which were issued in a private placement prior to the closing of the initial public offering, (ii) private placement warrants, which were issued in a private placement simultaneously with the closing of the initial public offering and the shares of Class A common stock underlying such private placement warrants and (iii) private placement warrants that may be issued upon conversion of Working Capital Loans had registration rights to require the Company to register a sale of any of its securities held by them prior to the consummation of the initial business combination pursuant to a registration rights agreement which was signed on the effective date of the initial public offering.

The holders of these securities were entitled to make up to three demands, excluding short form demands, that the Company registers such securities.

In addition, the holders had certain “piggy-back” registration rights with respect to registration statements filed subsequent to the Company’s completion of its initial business combination.

The Company would bear the expenses incurred in connection with the filing of any such registration statements.

In addition, the Anchor Investors would, upon receipt of their founder shares, execute a registration rights agreement with respect to their founder shares.

These registration rights terminated in connection with the consummation of the Business Combination.

In connection with the consummation of the Business Combination, AMCI, the Sponsor, Legacy LanzaTech, and certain of the Legacy LanzaTech stockholders and AMCI stockholders entered into a Registration Rights Agreement (the “Registration Rights Agreement”), pursuant to which, among other things, such stockholders were granted certain registration rights with respect to certain securities held by them.

In addition, the Registration Rights Agreement provides that the Sponsor, then-holders of all outstanding shares of the Company’s Class B common stock, and certain holders of shares of Legacy LanzaTech capital stock will be subject to certain restrictions on transfer with respect to their shares of common stock and LanzaTech warrants.

Such restrictions will end (i) with respect to the Sponsor and the holders of the Company’s Class B common stock, on the earlier of (a) the date that is one year following the closing of the Business Combination, (b) such date upon which the closing price per share of common stock equals or exceeds $ 12.00 per share for any 20 trading days within any 30 day trading period commencing at least 150 days after the closing of the Business Combination and (c) the date on which LanzaTech completes a liquidation, merger, capital stock exchange, reorganization or other similar transaction after the Business Combination that results in all of LanzaTech’s stockholders having the right to exchange their shares of common stock for cash, securities or other property, and (ii) with respect to the holders of shares of Legacy LanzaTech capital stock, on the date that is six months following the closing of the Business Combination.

Underwriting Agreement

The Company granted the underwriters a 45-day option from the date of the underwriting agreement to purchase up to an additional 2,250,000 units to cover over-allotments, if any.

On September 17, 2021, the over-allotment option expired unexercised, resulting in the forfeiture of 562,500 shares of founder shares.

The underwriters were paid an underwriting discount of 1 % of the gross proceeds of the initial public offering, or $ 1,500,000 .

Additionally, in connection with the initial public offering, the Company agreed to pay the underwriters a deferred underwriting fee of 3.5 % of the gross proceeds, or $ 5,250,000 , of the initial public offering upon the completion of the Company’s initial business combination.

On September 29, 2022, as discussed further below, Evercore Group L.L.C., (“Evercore”) the representative of the underwriters of the initial public offering, waived its deferred underwriting fee that accrued from its participation in the initial public offering.

The Company recognized approximately $ 4.9 million of the commissions waiver as a reduction to additional paid-in capital in the statements of changes in stockholders’ deficit for the year ended December 31, 2022, as this portion represents an extinguishment of deferred underwriting commissions on public shares which was originally recognized in accumulated deficit.

The remaining balance of approximately $ 172,000 is recognized as a gain from extinguishment

LANZATECH GLOBAL, INC.

(FORMERLY KNOWN AS AMCI ACQUISITION CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

of deferred underwriting commissions on public shares in the consolidated statements of operations, which represents the original amount expensed in the Company’s initial public offering.

On September 27, 2022 and September 29, 2022, the Company received notice and a formal letter, respectively, from Evercore Group, L.L.C., an underwriter in the Company’s initial public offering, advising that it had, among other things, (i) resigned from and ceased or refused to act in, its roles as co-placement agent, co-capital markets advisor and exclusive financial advisor to the Company in connection with the Merger and as underwriter in the Company’s initial public offering and (ii) waived its right to receive an aggregate of $ 13,050,000 in fees, all of which were contingent upon and payable upon the closing of the Merger, consisting of $ 500,000 for its role as co-placement agent, $ 7,500,000 for its role as exclusive financial advisor and $ 5,050,000 of deferred underwriting fees accrued from its participation in the Company’s initial public offering, as well as any expense reimbursements owed to it under those arrangements.

Note 6 — Class A Common Stock Subject to Possible Redemption

The Company’s Class A common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of future events.

The Company is authorized to issue 280,000,000 shares of Class A common stock with a par value of $ 0.0001 per share.

Holders of the Company’s Class A common stock are entitled to one vote for each share.

As of December 31, 2022 and 2021, there were 15,000,000 shares of Class A common stock outstanding subject to possible redemption and are classified outside of permanent equity in the balance sheet.

The Class A common stock subject to possible redemption reflected on the balance sheets is reconciled in the following table:

Gross proceeds $ 150,000,000

Amount allocated to public warrants ( 5,100,000 )

Class A common stock issuance costs ( 13,306,092 )

Accretion of carrying value to redemption value 18,406,092

Class A common stock subject to possible redemption, December 31, 2021 $ 150,000,000

Subsequent remeasurement of Class A common stock subject to possible redemption 1,113,633

Class A common stock subject to possible redemption, December 31, 2022 $ 151,113,633

Note 7 — Stockholders’ Deficit

Preferred Stock — The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $ 0.0001 and provides that shares of preferred stock may be issued from time to time in one or more series.

The Company’s board of directors will be authorized to fix the voting rights, if any, designations, powers, preferences, the relative, participating, optional or other special rights and any qualifications, limitations and restrictions thereof, applicable to the shares of each series.

As of December 31, 2022 and 2021, there were no shares of preferred stock issued or outstanding.

Class A Common Stock — The Company is authorized to issue 280,000,000 shares of Class A common stock with a par value of $ 0.0001 per share.

As of December 31, 2022 and 2021, there were 15,000,000 shares of Class A common stock issued and outstanding, all of which were subject to possible redemption and are classified as temporary equity (see Note 6).

Class B Common Stock — The Company is authorized to issue 20,000,000 Class B common stock with a par value of $ 0.0001 per share.

As of December 31, 2022 and 2021, there were 3,750,000 shares of Class B common stock issued and outstanding (see Note 4).

LANZATECH GLOBAL, INC.

(FORMERLY KNOWN AS AMCI ACQUISITION CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Holders of Class A common stock and holders of Class B common stock will vote together as a single class on all matters submitted to a vote of the Company’s stockholders except as required by law.

Unless specified in the Company’s amended and restated certificate of incorporation, or as required by applicable provisions of the Delaware General Corporation Law (“DGCL”) or applicable stock exchange rules, the affirmative vote of a majority of the Company’s shares of common stock that are voted is required to approve any such matter voted on by its stockholders.

The Class B common stock will automatically convert into shares of Class A common stock concurrently with or immediately following the consummation of the initial business combination on a one -for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like, and subject to further adjustment as provided in the Amended and Restated Certificate of Incorporate.

In the case that additional shares of Class A common stock or equity-linked securities are issued or deemed issued in connection with the initial business combination, the number of shares of Class A common stock issuable upon conversion of all founder shares will equal, in the aggregate, on an as-converted basis, 20 % of the total number of shares of Class A common stock outstanding after such conversion (after giving effect to any redemptions of shares of Class A common stock by public stockholders), including the total number of shares of Class A common stock issued, or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the initial business combination, excluding any shares of Class A common stock or equity-linked securities or rights exercisable for or convertible into shares of Class A common stock issued, or to be issued, to any seller in the initial business combination and any private placement warrants issued to the Sponsor, officers or directors upon conversion of working capital loans, provided that such conversion of founder shares will never occur on a less than one -for-one basis.

Deferred income tax assets are evaluated to determine if valuation allowances are required or should be adjusted.

Valuation allowances are established based on a more likely than not standard.

The ability to realize deferred tax assets depends on the Company’s ability to generate sufficient taxable income within the carry back or carryforward periods provided for in the tax law for each tax jurisdiction.

The Company considers the various possible sources of taxable income when assessing the realization of its deferred tax assets.

The valuation allowances recorded against deferred tax assets generated by taxable losses in certain jurisdictions will affect the provision for income taxes until the valuation allowances are released.

The Company’s provision for income taxes will include no tax benefit for losses incurred and no tax expense with respect to income generated in these jurisdictions until the respective valuation allowance is eliminated.

The Company records uncertain tax positions on the basis of a two-step process whereby it is determined whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position, and for those tax positions that meet the more likely than not criteria, the largest amount of tax benefit that is greater than 50% likely to be realized upon ultimate settlement with the related tax authority is recognized.

The Company recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense.

Related Party Transactions

The Company follows ASC 850-10, Related Party Transactions , for the identification of related parties and disclosure of related party transactions.

Pursuant to ASC 850-10-20, related parties include:

a) affiliates of the Company;

b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825-10-15, to be accounted for by the equity method by the investing entity;

c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management;

d) principal owners of the Company;

e) management of the Company;

f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests;

and g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

Refer to Note 6 - Investments , and Note 15 - Related Party Transactions , for further information.

Net Loss Per Share

Basic net loss per share is computed by dividing net loss attributable to participating stock by the weighted average number of shares of participating stock outstanding during the period.

Diluted net loss per share reflects potential dilution and is computed by dividing net loss attributable to participating stock by the weighted average number of shares of participating stock outstanding during the period.

The dilutive effect of outstanding awards, if any, is reflected in diluted earnings per share by application of the treasury stock method or if-converted method, as applicable.

Refer to Note 4 - Net Loss Per Share , for additional information.

Shareholders' Equity

The securities of the Company are represented by common shares, par value $ 0.0001 per share.

Each common share is entitled to one vote.

With respect to payment of dividends and distribution of assets upon liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, all common shares shall participate pro rata in such payment whenever funds are legally available and when declared by the Board of Directors of the Company, subject to the prior rights of holders of all classes of stock outstanding.

Recently Issued Accounting Pronouncements

Accounting Standards Update ("ASU") 2023-06, Disclosure Improvements:

Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative issued in August 2018

In October 2023, the FASB issued ASU 2023-06, which amends U.S.

GAAP to reflect updates and simplifications to certain disclosure requirements referred to FASB by the SEC.

The targeted amendments incorporate 14 of the 27 disclosures referred by the SEC into Codification.

Some of the amendments represent clarifications to, or technical corrections of, the current requirements.

Each amendment in ASU 2023-06 will only become effective if the SEC removes the related disclosure or presentation requirement from its existing regulation by June 30, 2027.

Because the company is subject to the SEC’s disclosure requirements, the effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from regulation S-X or Regulation S-K becomes effective, and will be applied prospectively, with early adoption prohibited.

No amendments were effective at December 31, 2023.

The Company is still currently evaluating the impact of the adoption of the new standard but does not expect a significant impact on the consolidated financial statements.

ASU 2023-07, Improvements to Reportable Segment Disclosures (“ASU 2023-07”)

In November 2023, the FASB issued ASU No.

2023-07, which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements.

The purpose of the amendments is to enable investors to better understand an entity’s overall performance and assess potential future cash flows.

This ASU is effective for public companies with annual periods beginning after December 15, 2023, and interim periods within annual period beginning after December 15, 2024, with early adoption permitted.

The Company is currently evaluating the impact that the adoption of the ASU will have on the consolidated financial statements.

ASU 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”)

In December 2023, the FASB issued ASU No.

2023-09, which requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid.

The standard is intended to help investors better assess how a company’s operations and related tax risks and tax planning and operational opportunities affect the company’s tax rate and prospects for future cash flows.

ASU 2023-09 improves disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction.

It also includes certain other amendments to improve the effectiveness of income tax disclosures.

This ASU is effective for public companies with annual periods beginning after December 15, 2024, with early adoption permitted.

The Company is currently evaluating the impact of the adoption of the standard in the income tax footnote disclosures.

Note 3 — Reverse Recapitalization

On February 8, 2023, Legacy LanzaTech and AMCI consummated the merger contemplated by the Merger Agreement (see Note 1 - Description of the Business ).

Immediately following the Business Combination, there were 196,222,737 shares of common stock outstanding with a par value of $ 0.0001 .

Additionally, there were outstanding warrants to purchase 12,574,200 shares of common stock.

As discussed in Note 2 - Summary of Significant Accounting Policies , the Business Combination was accounted for as a reverse recapitalization in accordance with US GAAP.

Under this method, while AMCI was the legal acquirer, it has been treated as the “acquired” company for financial reporting purposes.

Accordingly, the Business Combination was treated as the equivalent of pre-combination Legacy LanzaTech issuing stock for the net assets of AMCI, accompanied by a recapitalization.

The net assets of AMCI were stated at historical cost, with no goodwill or other intangible assets recorded.

Operations prior to the Business Combination are those of pre-combination Legacy LanzaTech.

Reported shares

and earnings per share available to holders of the Company’s common stock and preferred shares, prior to the Business Combination, have been retroactively restated to reflect the exchange ratio established in the Business Combination (approximately one pre-combination Legacy LanzaTech share to 4.3747 of the Company’s shares).

Upon closing of the Business Combination, the shareholders of AMCI, including AMCI founders, were issued 10,398,374 shares of common stock of the Company.

In connection with the closing, holders of 8,351,626 shares of common stock of AMCI were redeemed at a price per share of approximately $ 10.16 .

In connection with the Closing, 18,500,000 shares of common stock of the Company were issued to PIPE investors.

15,500,000 of those shares were issued at a price per share of $ 10.00 .

The remaining 3,000,000 shares were issued upon conversion of the AM SAFE liability.

The Company incurred $ 7,223 in transaction costs relating to the Business Combination and recorded those costs against Additional paid-in capital in the consolidated balance sheets.

The number of shares of Class A common stock issued and outstanding immediately following the consummation of the Business Combination and PIPE financing were:

Shares Percentage

Legacy LanzaTech shares 167,324,363 85.3 %

Public stockholders 10,398,374 5.3 %

PIPE shares 18,500,000 9.4 %

Total 196,222,737 100 %

The following table reconciles the elements of the Business Combination and PIPE financing to the consolidated statements of cash flows:

Recapitalization

Cash - AMCI trust account 1

Cash - PIPE financing 155,000

Transaction costs allocated to equity ( 5,709 )

Effect of the Business Combination and PIPE financing $ 213,381

__________________

(1) The cash from the AMCI trust account is net of redemptions and the payment of pre-combination AMCI expenses.

The following table reconciles the elements of the Business Combination and PIPE financing to the change in Additional paid-in capital on the consolidated statement of changes in redeemable preferred stock and shareholders' equity/deficit:

Recapitalization

Cash - AMCI trust account $ 64,090

Public Warrants and Private Placement Warrants recorded on the Closing Date ( 4,624 )

Cash - PIPE financing 155,000

Conversion of the AM SAFE 29,730

Transaction costs allocated to equity ( 7,223 )

par value of shares held by PIPE investors and public stockholders ( 3 )

Total additional paid-in capital from recapitalization $ 236,970

Note 4 — Net Loss Per Share

Basic net loss per share is computed by dividing net loss by the weighted-average number of shares of common stock of the Company outstanding during the period.

Diluted net loss per share is computed by giving effect to all common stock equivalents of the Company, including equity-classified share-based compensation, the Brookfield SAFE, warrants, and contingently redeemable preferred stock, to the extent dilutive.

Earnings per share calculation for all periods prior to the Business Combination have been retrospectively restated to the equivalent number of shares reflecting the exchange ratio established in the Merger Agreement of 4.3747 .

The following table presents the calculation of basic and diluted net loss per share for the Company’s common stock (in thousands, except shares and per share amounts):

Year Ended December 31,

Net loss for basic and diluted earnings per common share $ ( 134,098 ) $ ( 76,356 )

Unpaid cumulative dividends on preferred stock ( 4,117 ) ( 38,672 )

Net loss allocated to common shareholders $ ( 138,215 ) ( 115,028 )

Weighted-average shares used in calculating net loss per share, basic and diluted 176,023,219 9,302,080

Net loss per common share, basic and diluted (1)

$ ( 0.79 ) $ ( 12.37 )

__________________

(1) In periods in which the Company reports a net loss, all common stock equivalents are excluded from the calculation of diluted weighted average shares outstanding because of their anti-dilutive effect on loss per share.

As of December 31, 2023 and 2022, common stock equivalents not included in the computation of loss per share because their effect would be antidilutive include the following:

Redeemable convertible preferred stock (if converted) — 129,148,393

Options 16,411,978 14,661,253

RSUs 7,084,967 —

RSAs — 2,535,825

Brookfield SAFE 5,000,000 —

Warrants 16,657,686 985,278

Total 45,154,631 147,330,749

The preferred shares automatically converted into common shares upon the Business Combination at a 1 :1 ratio.

On February 8, 2023, upon conversion of the preferred shares, the cumulative accrued, declared and unpaid dividends on the preferred shares became payable.

The total amount of cumulative accrued, undeclared and unpaid dividends was approximately $ 241,529 on the Closing Date.

As stipulated by the Merger Agreement, this amount was divided by 10 and resulted in the issuance of an additional 24,152,942 common shares.

Prior to the Business Combination, the additional 129,148,393 of common stock equivalents resulting from any such conversion are not included in the computation of diluted net loss per share because doing so would be anti-dilutive.

In connection with the AM SAFE and Brookfield SAFE, see Note 10 - Fair Value , the Company could issue additional potential shares of common stock.

Shares related to the AM SAFE were issued on the Closing Date.

Shares related to the Brookfield SAFE and AM SAFE warrant have not been issued as of December 31, 2023.

The AM SAFE warrant became exercisable for a fixed number of shares as of the Closing Date, see Note 8 - Warrants .

As a result, these common stock equivalents are included in the warrants line item in the potential share table above as of December 31, 2023.

The per share issuance price for the Brookfield SAFE upon closing of the Business Combination is the liquidity price as defined in the Brookfield SAFE agreement.

As a result of the Business Combination, the Brookfield SAFE became convertible into a maximum number of shares, which is included in the table above as of December 31, 2023.

None of these common stock equivalents are included in the computation of diluted net loss per share until actually issued because doing so would be anti-dilutive.

Note 5 — Revenues

Disaggregated Revenue

The following table presents disaggregated revenue in the following categories (in thousands):

Year Ended December 31,

Contract Types:

Licensing $ 3,449 $ 2,160

Engineering and other services 39,196 19,061

Biorefining revenue $ 42,645 $ 21,221

Joint development agreements 8,416 6,021

Contract research 6,233 6,101

Joint development and contract research revenue $ 14,649 $ 12,122

CarbonSmart product 5,337 4,000

Total Revenue

$ 62,631 $ 37,343

The following table presents revenue from partners in collaborative arrangements and from grant contributions which are included in the table above as follows (in thousands):

Year Ended December 31,

Revenue from partners in collaborative agreements included in the Joint development agreements above

Revenue from grant contributions included in the Engineering and other services above

The following table presents disaggregation of the Company’s revenues by customer location for the twelve months ended months ended December 31, 2023 and 2022 (in thousands):

Year Ended December 31,

North America $ 17,618 $ 17,149

Europe, Middle East, Africa (EMEA) 37,447 11,500

Asia 3,570 5,752

Australia 3,996 2,942

Total Revenue

$ 62,631 $ 37,343

Contract balances

The following table provides changes in contract assets and liabilities (in thousands):

Current Contract Assets Current Contract Liabilities Non-current Contract Liabilities

Balance as of December 31, 2022 $ 18,000 $ 3,101 $ 10,760

Additions to unbilled accounts receivable 61,453 — —

Increases due to cash received — 10,058 —

Unbilled accounts receivable recognized in trade receivables ( 51,405 ) — —

Decrease on revaluation on currency 190 — 160

Reclassification from long-term to short-term — 2,687 ( 2,687 )

Reclassification to revenue as a result of performance obligations satisfied — ( 12,648 ) —

Balance as of December 31, 2023 $ 28,238 $ 3,198 $ 8,233

The increase in contract assets was mostly due to unbilled accounts receivable resulting from revenue recorded under contracts with customers and grants where the Company performed engineering and other services, and primarily relates to contracts with government entities.

The decrease in contract liabilities was primarily due to the recognition of revenue during the period related to advance payments previously received by the Company for engineering and other services contracts with customers.

As of December 31, 2023 and December 31, 2022 the Company had $ 11,157 and $ 11,695 , respectively, of billed accounts receivable, net of allowance.

The contract liability balance comprises unconditional payments received from the Company’s customers prior to the satisfaction of the related performance obligations.

Such amounts are anticipated to be recorded as revenues when services are performed in subsequent periods.

The Company expects to recognize the amounts classified as current contract liabilities in revenue within one year or less and those classified as non-current within two to three years.

Remaining performance obligations

Transaction price allocated to the remaining performance obligations represents contracted revenue that has not yet been recognized, which includes unearned revenue that will be recognized as revenue in future periods.

Transaction price allocated to remaining performance obligations is influenced by several factors, including the length of the contract term compared to the research term and the existence of customer specific acceptance rights.

Remaining performance obligations consisted of the following (in thousands):

December 31, 2023 December 31, 2022

Current $ 3,198 $ 3,101

Non-current 8,233 10,760

$ 11,431 $ 13,861

Note 6 — Investments

HTM Debt Securities

HTM debt securities are comprised of U.S.

Treasury bills and notes, Yankee debt securities, and corporate debt securities.

HTM debt securities are classified as short-term or long-term based upon the contractual maturity of the underlying investment.

December 31, 2023

(in thousands)

Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Accrued Interest

US Treasury bills and notes

20,423 6 $ — $ 20,429 $ 14

Corporate debt securities

21,736 14 ( 33 ) 21,717 209

Yankee debt securities 3,000 — ( 8 ) 2,992 43

Total debt securities due within a year

$ 45,159 $ 20 $ ( 41 ) $ 45,138 $ 266

Total HTM Debt Securities

45,159 20 ( 41 ) 45,138 266

The Company regularly reviews held-to-maturity securities for declines in fair values that are determined to be credit related.

As of December 31, 2023, the Company did not have an allowance for credit losses related to held-to-maturity securities.

Equity investments

The Company’s equity investments consisted of the following (in thousands):

December 31, 2023 December 31, 2022

Equity Method Investment in LanzaJet $ 7,066 $ 10,561

Equity Security Investment in SGLT 14,990 14,990

Total Investment

$ 22,056 $ 25,551

On May 13, 2020, the Company contributed $ 15,000 in intellectual property in exchange for a 37.5 % interest (“Original Interest”) of LanzaJet, Inc.

(“LanzaJet”) in connection with an investment agreement (“Investment Agreement”).

The Company accounts for the transaction as a revenue transaction with a customer under ASC 606.

The licensing and technical support services provided are recognized as a single combined performance obligation satisfied over the expected period of those services, beginning May 2020 through December 2025.

During the years ended December 31, 2023 and December 31, 2022, the Company recognized revenue from this arrangement of $ 2,249 and $ 2,160 respectively, net of intra-entity profit elimination and has associated deferred revenue of $ 5,375 and $ 8,062 , as of December 31, 2023 and December 31, 2022, respectively.

Intra-entity profits related to this arrangement are $ 437 and $ 527 for the years ended December 31, 2023 and 2022, respectively.

Intra-entity profits are amortized over a 15-year period through 2034.

Between February 1, 2021 and April 4, 2021, LanzaJet closed two additional rounds of investment which reduced the Company's Original Interest to approximately 23 %.

In connection with the LanzaJet Note Purchase Agreement as described in Note 15 - Related Party Transactions , LanzaJet issued warrants that are exercisable for $ 0.01 by the holder when the related funds are drawn by LanzaJet.

The warrants held by LanzaTech and other lenders meet the accounting criteria for in-substance common stock at the time the related note commitment is drawn by LanzaJet and the warrants become exercisable.

As of December 31, 2023, LanzaTech’s ownership was diluted to 23.06 % because LanzaTech received proportionally fewer warrants than the other investors.

The Company recorded a gain on dilution of $ 532 .

LanzaTech’s ownership is subject to further dilution to 22.38 % if LanzaJet draws additional funds committed in the LanzaJet Note Purchase Agreement and the remaining warrants are exercisable by the holders.

Under the LanzaJet Investment Agreement, certain other LanzaJet shareholders agreed to make an additional cash investment following the achievement of certain development milestones relating to the demonstration facility.

If made, these additional investments would fund the development and operation of commercial facilities that would sublicense the relevant fuel production technology from LanzaJet.

Upon the closing of each of the first three of these additional investments and no later than the sublicensing of the relevant facility, LanzaTech has a right to receive additional LanzaJet shares of up to 45 million shares in the aggregate for no additional consideration.

To date, these shares have not been issued.

The carrying value of our equity method investment in LanzaJet as of December 31, 2023 and December 31, 2022 was approximately $ 3,400 and $ 3,700 less than our proportionate share of our equity method investees’ book values, respectively.

The basis differences are largely the result of a difference in the timing of recognition of variable consideration to which we may become entitled in exchange for our contribution of intellectual property to LanzaJet.

The variable consideration we may receive will be in the form of additional ownership interests and the majority of the basis difference will reverse in connection with recognition of that variable consideration.

In connection with a sublicense agreement to LanzaJet under our license agreement with Battelle Memorial Institute (“Battelle”), LanzaTech remains responsible for any failure by LanzaJet to pay royalties due to Battelle.

The fair value of LanzaTech’s obligation under this guarantee was immaterial as of December 31, 2023 and December 31, 2022.

On September 28, 2011, the Company contributed RMB 25,800 (approx.

$ 4,000 ) in intellectual property in exchange for 30 % of the registered capital of Beijing Shougang LanzaTech Technology Co., LTD (“SGLT”).

As of December 31, 2022, the Company’s interest in SGLT’s registered capital is approximately 9.31 % as a result of the admittance of new investors during the year.

As of September 30, 2022 , the Company no longer had significant influence over the operating and financial policies of SGLT due to the significant and sustained decrease in SGLT's technological dependence on LanzaTech.

As such, the Company ceased applying the equity method and from October 1, 2022 and forward, the Company accounts for its investment in equity security of SGLT using the alternative measurement principals as permitted under ASC 321, Investments - Equity Securities, because SGLT's fair value is not readily determinable.

For the years ended December 31, 2023 , there was no change in the value of the investment in SGLT.

As of December 31, 2023 and December 31, 2022, there were no impairments of equity investments.

During the years ended December 31, 2023 and 2022, the Company received no dividends from equity investments.

See Note 15 - Related Party Transactions , for information on revenues, accounts receivable, contract assets and purchases and open accounts payable with its equity investments.

The following table presents summarized aggregated financial information of the equity method investments:

Year Ended December 31,

Selected Statement of Operations Information (1) :

Revenues 4,542 40,985

Gross profit 2,526 7,319

Net loss ( 14,881 ) ( 6,221 )

Net loss attributable to the Company ( 3,432 ) ( 1,422 )

Year Ended December 31,

Selected Balance Sheet Information (2) :

Current assets 79,843 72,711

Non-current assets 185,720 114,736

Current liabilities 44,145 15,534

Non-current liabilities 175,899 114,934

__________________

(1) As of September 30, 2022 the Company no longer accounts for the investment in SGLT under the equity method.

As such, the 2022 income statement amounts reflect SGLT activity for the nine months ended September 30, 2022 and LanzaJet activity for the year ended December 31, 2022.

The 2023 income statement amounts reflect LanzaJet activity for the year ended December 31, 2023.

(2) The balance sheet information reflects LanzaJet as of December 31, 2023 and 2022.

As of December 31, 2023 and 2022, there were no impairments of equity method investees.

During 2023 and 2022, the Company received no dividends from equity method investments.

See Note 15 - Related Party Transactions, for information on sales, accounts receivable, contract assets and purchases and open accounts payable with equity method investees.

Note 7 — SAFE

As of December 31, 2022, the AM SAFE had a fair value of $ 28,986 and was recorded within AM SAFE liability on the consolidated balance sheets.

On the Closing Date of the Business Combination, the AM SAFE converted into 3,000,000 shares of common stock.

As of the Closing Date, the AM SAFE had a fair value of $ 29,730 , which equals the closing price of approximately $ 9.91 on the Closing Date, multiplied by the number of shares issued.

The AM SAFE was adjusted to its fair value on the Closing Date prior to settlement.

As of December 31, 2022, the AM SAFE had a fair value of $ 28,986 .

Brookfield SAFE

On October 2, 2022, LanzaTech entered into the Brookfield SAFE and received cash proceeds of $ 50,000 as the Initial Purchase Amount.

In exchange, the Company granted to Brookfield the right to certain shares of the Company's capital stock.

On the fifth anniversary of the Brookfield SAFE, LanzaTech is required to repay in cash the Initial Purchase Amount less any Non-Repayable Amount (the “Remaining Amount”), as well as interest on such Remaining Amount in the high single digits, compounded annually.

For each $ 50,000 of aggregate equity funding required for qualifying projects presented to Brookfield in accordance with the Brookfield Framework Agreement (discussed below), the Remaining Amount will be reduced by $ 5,000 (such cumulative reductions the “Non-Repayable Amount”) and converted into LanzaTech Shares at $ 10.00 per share, which is the share price paid by the PIPE investors in the Business Combination.

Interest on the corresponding amount will be forgiven.

Each project presented must meet certain criteria in order to be considered a qualifying project.

Additionally, Brookfield may, at any time at its option, convert all or a portion of the Initial Purchase Amount less any amount that has already been converted or repaid into shares of LanzaTech capital stock at the same $ 10.00 per share price.

The Brookfield SAFE has not yet converted as a qualifying financing has not yet occurred and no qualified project investments have been presented to Brookfield as of December 31, 2023 or 2022.

As of December 31, 2023 and 2022, the fair value of the Brookfield SAFE was $ 25,150 and $ 50,000 respectively and was recorded within Brookfield SAFE liability on the consolidated balance sheets.

Brookfield Framework Agreement

On October 2, 2022, LanzaTech entered into a framework agreement with Brookfield (the “Brookfield Framework Agreement”).

Under such agreement, LanzaTech agreed to exclusively offer Brookfield the opportunity to acquire or invest in certain projects to construct commercial production facilities employing carbon capture and transformation technology in the U.S., the European Union, the United Kingdom, Canada or Mexico for which LanzaTech is solely or jointly responsible for obtaining or providing equity financing, subject to certain exceptions.

LanzaTech agreed to present Brookfield with projects that over the term of the agreement require equity funding of at least $ 500,000 in the aggregate.

With respect to projects acquired by Brookfield, LanzaTech is entitled to a percentage of free cash flow generated by such projects determined in accordance with a hurdle-based return waterfall.

Brookfield has no obligation under the Brookfield Framework Agreement to invest in any of the projects.

There have been no investments in projects as of December 31, 2023 or 2022 .

Note 8 — Warrants

As of December 31, 2022 and 2021, in connection with the initial public offering, the Company has 7,500,000 public warrants and 3,500,000 private placement warrants outstanding.

Each whole warrant entitles the registered holder to purchase one share of Class A common stock at a price of $ 11.50 per share, subject to adjustment as discussed below, at any time commencing 30 days after the completion of the initial business combination, provided that the Company has an effective registration statement under the Securities Act covering the shares of Class A common stock issuable upon exercise of the warrants and a current prospectus relating to them is available (or the Company permits holders to exercise their warrants on a cashless basis under the circumstances specified in the warrant agreement) and such shares are registered, qualified or exempt from registration under the securities, or blue sky, laws of the state of residence of the holder.

The warrants will expire five years after the completion of the Company’s initial business combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.

The Company has agreed that as soon as practicable, but in no event later than 15 business days after the closing of the initial business combination, it will use its best efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the Class A common stock issuable upon exercise of the warrants.

The Company will use its best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the warrants in accordance with the provisions of the warrant agreement.

If a registration statement covering the shares of Class A common stock issuable upon exercise of the warrants is not effective by the 60 th business day after the closing of the initial business combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption.

Notwithstanding the above, if the Company’s Class A common stock are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elect, it will not be required to file or maintain in effect a registration statement, and in the event the Company do not so elect, it will use its best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.

LANZATECH GLOBAL, INC.

(FORMERLY KNOWN AS AMCI ACQUISITION CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Once the warrants become exercisable, the Company may redeem the outstanding warrants:

Warrants on preferred shares

In connection with certain loan borrowing agreements and equity raises, the Company had issued warrants to purchase its preferred shares representing 985,278 preferred shares.

The warrants were accounted for as liabilities in accordance with ASC 480, and were presented within Warrants on the consolidated balance sheets as of December 31, 2022.

The warrant liabilities were measured at fair value at inception and on a recurring basis, with changes in fair value presented within Other expense, net on the consolidated statements of operations and comprehensive loss.

In connection with the closing of the Business Combination, all warrants were exercised on a cashless basis and are no longer outstanding.

The warrants were exercised for 594,309 shares of preferred stock, which were converted at the closing of the Business Combination into shares of common stock.

The exercise prices of the warrants ranged from $ 3.36 to $ 4.56 as of the closing of the Business Combination.

Immediately before the exercise of these warrants, the associated warrant

liability was marked-to-market a final time to $ 5,890 , which is equal to the number of shares issued multiplied by the share price of $ 9.91 on the date of exercise, February 8, 2023.

AM SAFE warrant

The warrant related to the AM SAFE (“AM SAFE warrant”) was accounted for as a liability in accordance with ASC 480 prior to the consummation of the Business Combination and was presented within warrants on the consolidated balance sheet as of December 31, 2022.

As a result of the Business Combination and issuance of the PIPE shares, the number of common shares available under the AM SAFE warrant equals 300,000 .

The exercise price of the AM SAFE warrant is $ 10.00 per share as determined on the Closing Date.

The AM SAFE warrant expires at the earliest of (a) the fifth anniversary of the Business Combination, (b) the consummation of a dissolution event and (c) a change of control.

Due to the AM SAFE warrant becoming exercisable for a fixed number of shares at a fixed exercise price, it no longer meets the criteria for liability accounting under ASC 480 and meets the criteria for equity classification under ASC 815-40.

As a result, on the Closing Date, the AM SAFE warrant was marked-to-market a final time to $ 1,800 through Other expense, net on the consolidated statements of operations and comprehensive loss and reclassified to Additional paid-in capital on the consolidated balance sheets.

Shortfall Warrants

On March 27, 2023, the Company issued an aggregate of 2,073,486 warrants to ACM and 2,010,000 warrants to Vellar pursuant to the Forward Purchase Agreement (collectively, the “Shortfall Warrants”), as further described in Note 2 - Summary of Significant Accounting Policies .

Each Shortfall Warrant entitles the registered holder to purchase one share of common stock at a price of $ 10.00 per share, subject to adjustment in the event that the Company sells, grants or otherwise issues common stock or common stock equivalents at an effective price less than the then current exercise price of the Shortfall Warrants, at any time commencing on or after March 27, 2023.

A holder of a Shortfall Warrant may exercise such warrants on a cashless basis.

The Shortfall Warrants expire on the fifth anniversary of their issuance.

On the issuance date, the Shortfall Warrants met the definition of a derivative but did not qualify for the exception from derivative accounting under the indexation guidance and therefore met the criteria for liability classification under ASC 815.

On May 13, 2023, the Company amended the Shortfall Warrant agreement.

Under the amended agreement, the Shortfall Warrants meet the requirements for equity classification under ASC 815-40.

Consequently, the Company recorded a gain of $ 2,042 as of the date of the amendment to reflect the fair value of $ 3,063 at the date of the amendment through Other expense, net on the consolidated statements of operations and comprehensive loss and reclassified the Shortfall Warrants to Additional paid-in capital on the consolidated balance sheets.

Public Warrants and Private Placement Warrants

As part of AMCI’s initial public offering (“IPO”), AMCI issued warrants to third-party investors where each whole warrant entitles the holder to purchase one share of the Company’s common stock at an exercise price of $ 11.50 per share (the “Public Warrants”).

Simultaneously with the closing of the IPO, AMCI completed the private sale of warrants where each warrant allows the holder to purchase one share of the Company’s common stock at $ 11.50 per share.

Additionally, prior to the consummation of the Business Combination, AMCI issued warrants for the settlement of a working capital loan.

The working capital warrants have the same terms as the private sale of warrants issued at the IPO.

Warrants sold in the private sale at the IPO and the warrants issued to convert the working capital loan are collectively referred to as the “Private Placement Warrants”.

On the Closing Date and as of December 31, 2023 , 7,499,924 Public Warrants and 4,774,276 Private Placement Warrants remained outstanding.

These warrants expire on the fifth anniversary of the Business Combination or earlier upon redemption or liquidation and are exercisable commencing 30 days after the Business Combination, provided that the Company has an effective registration statement under the Securities Act covering the shares of common stock issuable upon exercise of the warrants and a current prospectus relating to them is available (or the Company permits holders to exercise their warrants on a cashless basis under the circumstances specified in the warrant agreement) and registered, qualified or exempt from registration under the securities, or blue sky, laws of the state of residence of the holder.

Once the Public Warrants become exercisable, the Company may redeem the outstanding warrants:

in whole and not in part;

1 unchanged sentence

upon a minimum of 30 days’ prior written notice of redemption to each warrant holder;

• if, and only if, the closing price of the Class A common stock equals or exceeds $ 18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “— Warrants — Public Stockholders’ Warrants — Anti-Dilution Adjustments”) for any 20 trading days within a 30 -trading day period ending three trading days before we send the notice of redemption to the warrant holders.

In addition, if (x) the Company issues additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination at an issue price or effective issue price of less than $ 9.20 per share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any founder shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60 % of the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the date of the consummation of the initial business combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s Class A common stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummate the initial business combination (such price, the “Market Value”) is below $ 9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115 % of the higher of the Market Value and the Newly Issued Price, the $ 18.00 per share redemption trigger price described above under “— Redemption of warrants when the price per share of Class A common stock equals or exceeds $ 18.00 ” will be adjusted (to the nearest cent) to be equal to 180 % of the higher of the Market Value and the Newly Issued Price, and the $ 10.00 per share redemption trigger price described above under “— Redemption of warrants when the price per share of Class A common stock equals or exceeds $ 10.00 ” will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price.

Note 9 — Fair Value Measurement

The following table presents information as of December 31, 2022 and 2021 about the Company’s financial assets and liabilities that are measured at fair value on a recurring basis by level within the fair value hierarchy:

if, and only if, the closing price of the common stock equals or exceeds $ 18.00 per share for any 20 trading days within a 30 -trading day period ending three trading days before we send the notice of redemption to the warrant holders.

The Company additionally has the ability to redeem the Public Warrants at the option of the Company when the price of common stock exceeds $ 10.00 per share at a price of $ 0.10 per warrant.

In this scenario, warrant holders may choose to exercise their warrants on a cashless basis during the minimum 30 -day notice period, and receive common stock in exchange for their warrants at a rate based on fair value of the common stock and the proximity to the expiration date of the warrants.

As long as the Private Placement warrants are held by AMCI Sponsor II LLC (the “Sponsor”) or its permitted transferees, they are not redeemable by LanzaTech.

If the Private Placement Warrants are held by holders other than the Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by LanzaTech in all redemption scenarios and exercisable by the holders on the same basis as the Public Warrants.

The Sponsor, or its permitted transferees, has the option to exercise the Private Placement Warrants on a cashless basis.

The Public Warrants and Private Placement Warrants are recognized as derivative liabilities in accordance with ASC 815.

Accordingly, the Company recognized the warrant instruments as liabilities at fair value as of the Closing Date, with an offsetting entry to Additional paid-in capital and adjusts the carrying value of the instruments to fair value through Other expense, net on the consolidated statements of operations and comprehensive loss at each reporting period until they are exercised.

As of December 31, 2023, the Public Warrants and Private Placement Warrants are presented within Warrants on the consolidated balance sheets .

Note 9 — Forward Purchase Agreement

As discussed in Note 2 - Summary of Significant Accounting Policies , the FPA consists of the Prepayment Amount, the FPA Put Option and the Fixed Maturity Consideration.

The Prepayment Amount of $ 60,547 is presented as a reduction to Additional paid-in capital in our consolidated balance sheets.

The value of the FPA Put Option represents the economics of the written put option, inclusive of the Variable Maturity Consideration, and is valued at $ 37,523 as of December 31, 2023.

The Fixed Maturity Consideration is valued at $ 7,228 as of December 31, 2023.

This represents the fair value of the Share Consideration and Fixed Maturity Consideration and is measured in accordance with the FVO.

Expensed transaction costs, representing the stock acquisition fees, in the amount of $ 451 are recorded in Other expense, net on the consolidated statements of operations and comprehensive loss.

Note 10 — Fair Value

The following table presents the Company’s fair value hierarchy for its assets and liabilities measured at fair value as of December 31, 2023 and December 31, 2022 (in thousands):

Fair Value Measurement as of

December 31, 2023

Description Quoted Prices in Active

(Level 1) Significant Other

Observable Inputs

(Level 2) Significant Other

Unobservable Inputs

Investments held in trust account $ 152,296,551 $ — $ —

Derivative liabilities – public warrants $ 1,800,000 $ — $ —

Derivative liabilities – private placement warrants $ — $ — $ 840,370

LANZATECH GLOBAL, INC.

(FORMERLY KNOWN AS AMCI ACQUISITION CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Level 1 Level 2 Level 3 Total

Cash equivalents $ 28,058 $ — $ — $ 28,058

$ 28,058 $ — $ — $ 28,058

FPA Put Option liability

$ — $ — $ 37,523 $ 37,523

Fixed Maturity Consideration — — 7,228 7,228

Brookfield SAFE liability — — 25,150 25,150

Private placement warrants — — 3,915 3,915

Public warrants 3,699 — — 3,699

Total liabilities

$ 3,699 $ — $ 73,816 $ 77,515

Fair Value Measurement as of

December 31, 2022

Description Quoted Prices in Active

(Level 1) Significant Other

Observable Inputs

(Level 2) Significant Other

Unobservable Inputs

Investments held in trust account $ 150,006,015 $ — $ —

Derivative liabilities – public warrants $ 3,825,000 $ — $ —

Derivative liabilities – private placement warrants $ — $ — $ 1,785,000

Transfers to/from Levels 1, 2 and 3 are recognized at the beginning of the reporting period.

The estimated fair value of public warrants was transferred from a Level 3 fair value measurement to a Level 1 measurement, when the public warrants were separately listed and traded in September 2021.

There were no other transfers between levels in the year ended December 31, 2022 and in the period from January 28, 2021 (inception) through December 31, 2021.

Level 1 assets include investments in mutual funds invested in U.S.

government securities and derivative warrant liabilities (public warrants).

The Company uses inputs such as actual trade data, quoted market prices from dealers or brokers, and other similar sources to determine the fair value of its investments.

For periods where no observable traded price is available, the fair value of the public warrants has been estimated using a Monte-Carlo simulation model and the private placement warrants has been estimated using a Black-Scholes option pricing model.

For periods subsequent to the detachment of the public warrants from the units, the fair value of the public warrants is based on the observable listed price for such warrants.

The estimated fair value of the public and private placement warrants, prior to the public warrants being traded in an active market, was determined using Level 3 inputs.

Inherent in a Monte-Carlo simulation and Black-Scholes option pricing model are assumptions related to the unit price, expected volatility, risk-free interest rate, term to expiration, and dividend yield.

The unit price is based on the publicly traded price of the units as of the measurement date.

The Company estimated the volatility for the public and private placement warrants based on the implied volatility from the traded prices of warrants issued by other special purpose acquisition companies.

The risk-free interest rate is based on interpolated U.S.

Treasury rates, commensurate with a similar term to the public and private placement warrants.

The expected life of the warrants is assumed to be equivalent to their remaining contractual term.

Finally, the Company does not anticipate paying a dividend.

Any changes in these assumptions can change the valuation significantly.

For the year ended December 31, 2022 and for the period from January 28, 2021 (inception) through December 31, 2021, the Company recognized a change to the statement of operations resulting from a decrease (increase) in the fair value of liabilities of approximately $ 3.0 million and $ 1.9 million, respectively, presented as change in fair value of derivative warrant liabilities on the accompanying consolidated statements of operations.

The following table provides quantitative information regarding Level 3 fair value measurements inputs at their measurement dates:

As of December 31, 2022 As of

Level 1 Level 2 Level 3 Total

Cash equivalents $ 523 $ — $ — $ 523

Warrants on preferred shares — — 2,119 2,119

Brookfield SAFE liability — — 50,000 50,000

AM SAFE warrant — — 1,989 1,989

AM SAFE liability — — 28,986 28,986

Total Liabilities

$ — $ — $ 83,094 $ 83,094

Forward Purchase Agreement

The fair value upon issuance of the FPA (both the FPA Put Option liability and Fixed Maturity Consideration) and the change in fair value from issuance to December 31, 2023, is included in Other expense, net in the consolidated statements of operations and comprehensive loss.

The fair value of the FPA was estimated using a Monte-Carlo Simulation in a risk-neutral framework.

Specifically, the future stock price is simulated assuming a Geometric Brownian Motion (“GBM”).

For each simulated path, the forward purchase value is calculated based on the contractual terms and then discounted back to present.

Finally, the value of the forward is calculated as the average present value over all simulated paths.

The Fixed Maturity Consideration was also valued as part of this

model as the timing of the payment of the Fixed Maturity Consideration may be accelerated if the Maturity Date is accelerated.

The following table represents the weighted average inputs used in calculating the fair value of the prepaid forward contract and the Fixed Maturity Consideration as of December 31, 2023:

December 31, 2023

Exercise price $ 11.50 $ 11.50

Stock price $ 5.03

Term (in years) 2.11

Expected volatility 50.0 %

Risk-free interest rate 4.16 %

Expected dividend yield — %

Warrants on preferred shares

The fair value of the warrants on preferred shares was estimated using a Black-Scholes option pricing model.

Since the warrants were exercised on February 8, 2023 (see Note 8 - Warrants, for a description of the valuation on that date), the following table represents the weighted average inputs used in calculating the fair value of the preferred share warrants outstanding as of December 31, 2022:

December 31, 2022

Stock price $ 5.21

Weighted average exercise price $ 3.96

Term (in years) 1.1

Expected volatility 73.4 %

Risk-free interest rate 4.47 %

Expected dividend yield — %

Shortfall Warrants

The fair value of the Shortfall Warrants was estimated using a Black-Scholes option pricing model.

The following table represents the weighted average inputs used in calculating the fair value of the Shortfall Warrants as of May 13, 2023 when the Shortfall Warrant Agreement was amended and the Shortfall Warrants were marked-to-market and reclassified to Additional paid-in capital on the consolidated balance sheets:

Stock price $ 3.42

Weighted average exercise price $ 10.00

Term (in years) 4.87

Expected volatility 54.0 %

Risk-free interest rate 3.46 %

Expected dividend yield — %

SAFE Liabilities and AM SAFE Warrant

The change in fair value between reporting periods for the Brookfield SAFE liability is included in Other expense, net in the consolidated statements of operations and comprehensive loss for years ended December 31, 2023 and 2022.

The change in fair value between December 31, 2022 and the Closing Date for the AM SAFE liability is included in Other expense, net in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2023.

See below for further details on the AM SAFE liability and see Note 8 - Warrants for further details on the AM SAFE warrant.

The Company’s AM SAFE liability (until conversion to shares on the Closing Date), AM SAFE warrant (until conversion to an equity classified warrant on the Closing Date) and Brookfield SAFE liability are mark-to-market liabilities and are classified within Level 3 of the fair value hierarchy as the Company is using a scenario-based approach which allowed the Company to estimate the implied value of the business based on the terms of the SAFE.

Significant unobservable inputs included probability and expected term.

Probability was based upon the likelihood of the Company closing a transaction with a special purpose acquisition company.

The expected term was based on the anticipated time until the SAFE investments would have a conversion event.

As of December 31, 2022, the AM SAFE had a fair value of $ 28,986 and was recorded within AM SAFE liability on the consolidated balance sheets.

Significant inputs for Level 3 AM SAFE liability fair value measurement at December 31, 2022 are as follows:

Near Term Long-Term

Key assumptions:

Probability weighting 61 % 39 %

Time to conversion (in years) 0.1 0.8

Liquidity price 100 % 90 %

Discount rate 24.7 % 24.7 %

At conversion to equity classification on February 8, 2023, the AM SAFE warrant was valued usin g a Black-Scholes option pricing model as the warrant became exercisable for a fixed number of shares at a fixed price as described in Note 8 - Warrants .

The following table represents the weighted average inputs used in calculating the fair value of the AM SAFE warrants outstanding at conversion to equity on February 8, 2023:

February 8, 2023

Stock price $ 9.91

Term (in years) 5.00

Expected volatility 70.0 %

Risk-free interest rate 3.82 %

Expected dividend yield — %

Significant inputs for Level 3 AM SAFE warrant fair value measurement at December 31, 2022 are as follows (in thousands):

Near Term Long-Term

Key assumptions:

Probability weighting 61 % 39 %

Remaining life (in years) 5.0 5.0

Volatility 75 % 75 %

Interest rate 3.99 % 3.99 %

Time to conversion (in years) 0.1 0.8

Risk-free interest rate 4.12 % 4.75 %

Dividend yield — % — %

The Brookfield SAFE is legal form debt that the Company has elected to measure using the FVO under ASC 825.

As of December 31, 2023, no part of the Brookfield SAFE has converted to Company common shares as a

qualifying financing had not yet occurred and no project investments were presented.

There were no cash flows associated with the Brookfield SAFE in the year ended December 31, 2023.

As of its issuance date, the fair value of the Brookfield SAFE was equal to the investment amount of $ 50,000 based on the orderly nature of the transaction.

The value as of December 31, 2022 remained the same due to the proximity of the valuation date to the issuance date (i.e., less than two months) and the absence of events which would indicate a change in expected payoffs to the investor.

As of December 31, 2022 the same expectations about sufficient projects meeting the agreed-upon investment criteria pursuant to the Brookfield Framework Agreement are maintained.

As such the Brookfield SAFE’s fair value was estimated to be $ 50,000 , as of December 31, 2022.

As of December 31, 2023, the Company expects to present sufficient projects to Brookfield to result in the Brookfield SAFE being automatically converted into shares.

Since the liquidity price is not expected to change during the life of the Brookfield SAFE, the number of shares that Brookfield receives is fixed.

Based on this expectation, the value of the Brookfield SAFE is equal to the Brookfield SAFE's as-converted value, which is the initial purchase amount, divided by the liquidity price, times the stock price, resulting in an estimated fair value of $ 25,150 recorded on the consolidated balance sheet.

Significant inputs for Level 3 Brookfield SAFE measurement at December 31, 2023 are as follows:

December 31, 2023

Initial purchase amount $ 50,000

Liquidity price $ 10.00

Stock price $ 5.03

Remaining term (years) 5.09 5.75

Risk-free rate 3.91 % 1.32 %

LANZATECH GLOBAL, INC.

(FORMERLY KNOWN AS AMCI ACQUISITION CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The change in the fair value of the derivative warrant liabilities, measured using Level 3 inputs, for the year ended December 31, 2022 and for the period from January 28, 2021 (inception) through December 31, 2021 is summarized as follows:

Derivative warrant liabilities at January 28, 2021 (inception) $ —

Issuance of Public and Private Warrants 7,515,000

Transfer of Public Warrants to Level 1 ( 5,100,000 )

Change in fair value of derivative liabilities ( 630,000 )

Derivative warrant liabilities at December 31, 2021 1,785,000

Change in fair value of derivative liabilities ( 944,630 )

Derivative warrant liabilities at December 31, 2022 $ 840,370

Public Warrants and Private Placement Warrants

For the Public Warrants, the Company uses inputs such as actual trade data, quoted market prices from dealers or brokers, and other similar sources to determine the fair value and recognized an increase in the fair value of the liability of approximately $ 1,224 on the consolidated statements of operations and comprehensive loss within Other expense, net representing the change in fair value from the Closing Date to December 31, 2023.

The fair value of the Private Placement Warrants was estimated using a Black-Scholes option pricing model.

For the year ended December 31, 2023, the Company recognized an increase in the fair value of liabilities of approximately $ 1,766 on the consolidated statements of operations and comprehensive loss within Other expense, net representing the change in fair value from the Closing Date to December 31, 2023.

The following table represents the weighted average inputs used in calculating the fair value of the Private Placement Warrants outstanding as of December 31, 2023:

December 31, 2023

Stock price $ 5.03

Exercise price $ 11.50

Term (in years) 4.11

Expected volatility 45.0 %

Risk-free interest rate 3.92 %

Expected dividend yield — %

The following tables represent reconciliations of the fair value measurements of the assets and liabilities using significant unobservable inputs (Level 3) (in thousands):

FPA Put Option

Fixed Maturity Consideration Shortfall Warrants Warrants on Preferred Shares AM SAFE liability AM SAFE warrant Brookfield SAFE Private placement warrants

Balance as of January 1, 2023 $ — $ — $ — $ ( 2,119 ) $ ( 28,986 ) $ ( 1,989 ) $ ( 50,000 ) $ —

Recognized as a result of the Business Combination — — — — — — — ( 2,148 )

(Loss) gain recognized in other expense, net on the consolidated statement of operations and comprehensive loss

( 37,523 ) ( 7,228 ) ( 3,063 ) ( 3,770 ) ( 744 ) 189 24,850 ( 1,766 )

Conversion of warrants to preferred shares — — — 5,889 — — — —

Conversion of SAFE liability to equity classification

— — — — 29,730 — — —

Reclassification of warrant to equity

— — 3,063 — — 1,800 — —

Balance as of December 31, 2023

$ ( 37,523 ) $ ( 7,228 ) $ — $ — $ — $ — $ ( 25,150 ) $ ( 3,914 )

Warrants on Preferred Shares AM SAFE liability AM SAFE warrant Brookfield SAFE

Balance as of January 1, 2022 $ ( 1,145 ) $ ( 28,271 ) $ ( 1,729 ) $ —

Issuance of Brookfield SAFE Liability

— — — ( 50,000 )

Gain (loss) recognized in other expense, net on the consolidated statement of operations and comprehensive loss

( 974 ) ( 715 ) ( 260 ) —

Balance as of December 31, 2022

$ ( 2,119 ) $ ( 28,986 ) $ ( 1,989 ) $ ( 50,000 )

Note 11 — Other Current Assets

As of December 31, 2023 and 2022 other current assets consisted of the following (in thousands):

December 31, 2023 December 31, 2022

$ 1,750 $ 1,129

Materials and supplies 3,595 3,035

Prepaid assets 3,698 2,833

Other 3,518 4,160

$ 12,561 $ 11,157

Note 12 — Property, Plant, and Equipment, net

The Company’s property, plant and equipment, net consisted of the following (in thousands):

December 31, 2023 December 31, 2022

Land $ 64 $ 64

Leasehold improvements 4,837 4,126

Instruments and equipment 40,827 33,093

Vehicles 92 85

Office Equipment and furniture 2,103 1,719

Other 900 871

Construction in progress 6,287 6,780

$ 55,110 $ 46,738

Less accumulated depreciation and amortization $ 32,287 $ 27,049

Total property, plant and equipment, net

$ 22,823 $ 19,689

Depreciation for the years ended December 31, 2023 and December 31, 2022 totaled $ 5,452 and $ 4,660 , respectively.

Note 13 — Income Taxes

The Company files income tax returns in the U.S.

federal and Connecticut jurisdictions and is subject to examination.

The income tax provision consists of the following:

For the Year Ended December 31, 2022 For the Period from January 28, 2021

(inception) through December 31, 2021

Federal $ 309,320 $ —

Federal ( 15,220 ) ( 290,181 )

The Company is subject to federal and state income taxes in the United States, as well as income taxes in foreign jurisdictions in which it conducts business.

The Company does not provide for federal income taxes on the undistributed earnings of its foreign subsidiaries as such earnings are reinvested indefinitely.

The Company and its foreign subsidiaries have historically been loss generating entities that have resulted in no excess earnings to consider for repatriation and accordingly there are no deferred income taxes recognized for the years ended December 31, 2023 and 2022.

The Company recorded an income tax expense of $ 0 for the twelve months ended December 31, 2023 and 2022, representing an effective tax rate of 0 %.

The difference between the U.S.

federal statutory rate of 21 % and the Company's effective tax rate in the twelve months ended ended December 31, 2023 and 2022 is primarily due to a full valuation allowance related to the Company's U.S.

and foreign deferred tax assets.

The Company reassesses the need for a valuation allowance on a quarterly basis.

If it is determined that a portion or all of the valuation allowance is not required, it will generally be a benefit to the income tax provision in the period such determination is made.

The Company conducts business in multiple jurisdictions within and outside the United States.

Consequently, the Company is subject to periodic income tax examinations by domestic and foreign income tax authorities.

The Company is subject to audits for tax years 2017 and onward for federal purposes.

There are tax years which remain subject to examination in various other state and foreign jurisdictions that are not material to the Company's financial statements.

The components of (loss) income before income taxes and gain from equity method investees, net are as follows (in thousands):

Year Ended December 31,

United States $ ( 134,020 ) $ ( 73,271 )

Foreign ( 78 ) ( 3,085 )

Total $ ( 134,098 ) $ ( 76,356 )

The Company does not have any current or deferred taxes in either the United States or our foreign operations.

The following table is a reconciliation of income taxes computed at the statutory federal income tax rate ( 21.0 % federal income tax rate in the United States for 2023 and 2022) to the income tax expense (benefit) reflected in the consolidated statement of operations and comprehensive loss (in thousands, except percentages):

Year Ended December 31,

Income tax (benefit) at the statutory federal income tax rate $ ( 28,145 ) 21.0 % $ ( 16,035 ) 21.0 %

Foreign tax rate differential ( 15 ) — % ( 72 ) 0.1 %

State and local taxes ( 9,757 ) 7.3 % ( 6,961 ) 9.1 %

Share Based Compensation

197 ( 0.1 )% 288 ( 0.4 )%

Nondeductible loss on stock

6,324 ( 4.7 )% — — %

Equity method investment — — % ( 701 ) 0.9 %

Valuation allowance 31,661 ( 23.6 )% 26,286 ( 34.4 )%

Income tax provision $ 309,320 $ —

The Company’s net deferred tax assets are as follows:

Deferred True-Up — — % ( 2,836 ) 3.7 %

Other ( 265 ) 0.2 % 31 — %

Total income tax expense (benefit)

$ — — % $ — — %

Deferred Taxes

Significant components of deferred tax assets and liabilities were as follows (in thousands):

Year Ended December 31,

Deferred tax assets:

Start-up/Organization costs $ 305,401 $ 210,307

Net operating loss carryforwards — 79,874

Total deferred tax assets 305,401 290,181

Net operating loss and credit carryforwards 134,609 133,537

Stock-based compensation 4,526 2,071

Operating lease liability 6,281 2,473

Accrued bonus — 1,514

Accrued expenses — 239

Deferred revenue 148 126

Equity method investment 3,051 2,040

R&D capitalization

Other 1,051 460

$ 176,391 $ 142,460

Valuation allowance ( 171,223 ) ( 139,562 )

Deferred tax asset, net of allowance $ — $ —

In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible.

Management considers the scheduled reversal of deferred tax assets, projected future taxable income and tax planning strategies in making this assessment.

After consideration of all of the information available, management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance.

LANZATECH GLOBAL, INC.

(FORMERLY KNOWN AS AMCI ACQUISITION CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

ended December 31, 2022 and for the period from January 28, 2021 (inception) through December 31, 2021, the valuation allowance was$ 305,401 and $ 290,181 , respectively.

As of December 31, 2021, the Company had $ 380,351 of U.S.

federal net operating loss carryovers, which do not expire, available to offset future taxable income.

As of December 31, 2022, the net operating loss carryovers were fully utilized.

As such there were no federal net operating loss carryovers to offset future taxable income.

There were no unrecognized tax benefits as of December 31, 2022 and 2021.

No amounts were accrued for the payment of interest and penalties as of December 31, 2022 and 2021.

The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.

The Company is subject to income tax examinations by major taxing authorities since inception.

The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.

A reconciliation of the statutory federal income tax rate (benefit) to the Company’s effective tax rate (benefit) is as follows:

For the Year Ended December 31, 2022 For the Period from January 28, 2021 (inception) through December 31, 2021

Statutory federal income tax rate 21.0 % 21.0 %

Change in fair value of derivative warrant liabilities 59.4 % ( 855.9 ) %

Offering costs allocated to derivative warrant liabilities 0.0 % 214.0 %

Gain from settlement of deferred underwriting commissions 3.4 % — %

Capitalized merger costs ( 111.9 ) % — %

Change in valuation allowance ( 1.5 ) % 620.9 %

Income tax expense ( 29.6 ) % 0.0 %

Note 11 — Subsequent Events

The Company evaluated subsequent events and transactions that occurred up to the date the consolidated financial statements were issued.

Based upon this review, except as noted in Note 1, the Company did not identify any subsequent events that would have required adjustment or disclosure in the consolidated financial statements.

Net deferred tax asset 5,168 2,898

Deferred tax liabilities:

Operating lease asset ( 5,584 ) ( 2,125 )

Other 416 ( 773 )

Total deferred tax liabilities ( 5,168 ) ( 2,898 )

Net deferred income tax assets and liabilities:

At December 31, 2023 and 2022, the Company had $ 395,590 and $ 391,759 , respectively, of tax losses and credits carried forward subject to shareholder continuity and acceptance in the countries where the Company has tax losses carried forward.

R&D tax credits included within these amounts are $ 35,147 for both periods, which may be available to offset future income tax liabilities.

At December 31, 2023 and 2022, the net operating loss and credit carryforwards are comprised of $ 321,743 and $ 318,382 in the United States,$ 30,011 and $ 29,691 in state and local, $ 43,805 and $ 43,655 in foreign jurisdictions, respectively.

At December 31, 2023 and 2022, the Company had net operating loss carryforwards of approximately $ 145,090 and $ 146,467 , respectively, that expire in various years from 2024 through 2038, plus $ 215,388 and $ 210,145 , respectively, for which there is no expiration date.

Section 382 of the Internal Revenue Code imposes an annual limitation on the utilization of net operating loss carryforwards based on a statutory rate of return and the value of the corporation at the time of a “change of ownership” as defined by Section 382.

The Company had a change in ownership in November 2014.

T herefore, the Company’s ability to utilize its net operating loss carryforwards incurred prior to the 2014 ownership change, will be subject in future periods to annual limitations.

In assessing the realizability of deferred tax assets, the Company assesses whether it is more-likely-than-not that a portion or all of the deferred tax assets will not be realized.

The Company considers the scheduled reversal of deferred tax liabilities, tax planning strategies and projected future taxable income in making this assessment.

At December 31, 2023 and 2022, a valuation allowance of $ 171,223 and $ 139,562 , respectively, was recorded against certain deferred tax assets based on this assessment.

The Company believes it is more-likely-than-not that the tax benefit of the remaining net deferred tax assets will be realized.

The amount of net deferred tax assets considered realizable could be increased or reduced in the future if the Company’s assessment of future taxable income or tax planning strategies changes.

At December 31, 2023 and 2022, the Company had no tax liability or benefit related to uncertain tax positions.

No interest or penalties related to uncertain taxes have been recognized on the accompanying consolidated statements of operations.

Management does not expect a significant change in uncertain tax positions during the twelve months subsequent to December 31, 2023.

The Company conducts business in multiple jurisdictions within and outside the United States.

Consequently, the Company is subject to periodic income tax examinations by domestic and foreign income tax authorities.

During December 2021, the Internal Revenue Service completed an income tax examination of the Company’s U.S.

federal income tax return for the year ended December 31, 2016, which resulted in no impact to the Company’s consolidated financial statements.

The Company has no other ongoing tax examinations with domestic or foreign taxing authorities.

During 2021, the Company migrated its country of domicile from New Zealand to Delaware in the United States.

On migration, the Company was deemed to have disposed of all its assets and liabilities to a third-party at market value which resulted in taxable income to the Company for New Zealand income tax purposes.

The migration to Delaware is classified as a tax-free reorganization for U.S.

federal income tax purposes.

The Organization for Economic Co-operation and Development (OECD) has a framework to implement a global minimum corporate tax of 15% for companies with global revenues and profits above certain thresholds (referred to as Pillar 2.0), with certain aspects of Pillar 2.0 effective January 1, 2024 and other aspects effective January 1, 2025.

While it is uncertain whether the U.S.

will enact legislation to adopt Pillar 2, certain countries in which we operate have adopted legislation, and other countries are in the process of introducing legislation to implement Pillar 2.

We do not anticipate Pillar 2.0 to have material impacts on our effective tax rate, financial position or cash flows.

Note 14 — Share-Based Compensation

The Company adopted the LanzaTech 2023 Long-Term Incentive Plan (the “LTIP”) in conjunction with the closing of the Business Combination.

The LTIP provides for grants of a variety of awards to employees, directors, and other service providers to the Company, including, but not limited to stock options, stock appreciation rights, restricted stock awards, restricted stock units, performance awards and other stock-based awards or cash incentives.

Prior to the effective date of the closing of the Business Combination, the Company granted awards under the LanzaTech NZ Inc.

2013 Stock Plan, the LanzaTech NZ Inc.

2015 Stock Plan, and the LanzaTech NZ, Inc.

2019 Stock Plan, (collectively, the “Prior Stock Plans”).

Equity Classified Awards:

Under the LTIP, the Company has granted two types of RSUs:

time-based RSUs, and market-based RSUs.

Time-based RSUs granted to employees and other service providers (other than directors) are generally subject to a three-year annual pro-rata vesting schedule whereby the awards generally vest in 3 equal tranches on the first, second, and third anniversaries of the vesting commencement date, subject to grantee’s continued service through each vesting date.

However, vesting will accelerate in certain circumstances (e.g., retirement, death, disability, or a qualified termination in connection with a change in control).

Time-based RSUs granted to directors are subject to a one-year vesting schedule and the full award vests on the first anniversary of the vesting commencement date, subject to the director’s continued service through the vesting date.

However, vesting will accelerate in certain circumstances (e.g., removal in connection with a change in control).

The market-based RSUs have both a time-based and a market-based vesting component.

Both components must be met for the award to vest.

The market-based RSUs are subject to the same three-year annual pro-rata vesting

schedule as the employee time-based RSUs.

The market-based vesting component is satisfied if on any date during the period beginning on the 151 st date following the vesting commencement date and ending on the fifth anniversary of the vesting commencement date, the average closing price of a share of the Company’s common stock, equals or exceeds $ 11.50 , determined using the closing share price from the 20 trading days preceding such determination date.

The following assumptions were used in the lattice-based option valuation model for market-based RSUs granted during the year ended December 31, 2023.

There were no market-based RSUs granted during the year ended December 31, 2022.

Derived service period in years

Expected volatility

Expected dividends

Risk-free rate

3.45 % - 4.44 %

A summary of the unvested time-based and market-based equity-classified RSUs are presented in the following table:

Time-based RSUs

Market-based RSUs

(in thousands)

Weighted Average Grant Date Fair Value Shares

(in thousands) Weighted Average Grant Date Fair Value

January 1, 2023 — — — $ —

Granted 3,185 3.51 3,930 1.69

Vested ( 2 ) 3.45 — —

Cancelled/forfeited ( 28 ) 3.43 —

December 31, 2023 3,155 3.51 3,930 $ 1.69

The Company recorded compensation expense related to the time-based RSUs of $ 3,153 for the year ended December 31, 2023.

Unrecognized compensation costs as of December 31, 2023 was $ 7,919 and will be recognized over a weighted average of 2.20 years.

The Company recorded compensation expense related to the market-based RSUs of $ 3,440 for the year ended December 31, 2023.

Unrecognized compensation costs as of December 31, 2023 was 3,198 and will be recognized over a weighted average of 1.57 years.

Stock Options

In accordance with the LTIP and Prior Stock Plans, grantees have also been granted stock options to purchase common shares.

The exercise prices of each stock option was no less than the fair market value price of the Company’s common shares determined as of the date of grant.

The stock options generally vest over the course of two to five years , subject to the service provider’s continued service through each vesting date.

Upon termination of service, unvested stock options are forfeited in accordance with their terms unless the award agreement provides for accelerated vesting (e.g., due to retirement).

The below tables reflect the stock options granted prior to the Business Combination multiplied by the exchange ratio and the weighted average exercise price divided by the exchange ratio.

The following assumptions were used in the option valuation model for options granted during the year ended December 31, 2023.

There were no options granted during the year ended December 31, 2022.

Expected term in years

Expected volatility

76.70 % - 76.80 %

Expected dividends

Risk-free rate

3.45 % - 3.60 %

Stock option awards outstanding as of December 31, 2023 and changes during the period ended December 31, 2023 were as follows:

Shares subject to option (thousands)

Weighted average exercise price Weighted average remaining contractual term (years) Aggregate intrinsic value (thousands)

Outstanding at January 1, 2023

14,661 $ 1.48

Vested and expecting to vest at January 1, 2023 14,661 1.48

Exercisable at January 1, 2023

11,203 $ 1.44

Granted 3,556 3.77

Exercised ( 1,659 ) 1.54

Cancelled/forfeited ( 146 ) 2.08

Outstanding at December 31, 2023

16,412 $ 1.96 6.13 $ 51,601

Vested and expecting to vest at December 31, 2023 16,412 1.96 6.13 51,601

Exercisable at December 31, 2023

10,869 $ 1.49 4.95 $ 38,691

The Company recorded compensation expense related to the options of $ 5,623 and $ 2,527 for the years ended December 31, 2023 and 2022.

Unrecognized compensation costs as of December 31, 2023 was $ 8,321 and will be recognized over a weighted average of 2.07 years.

Restricted Stock Awards (“RSAs”)

Under the Prior Stock Plans, the Company granted RSAs which become eligible to vest upon the satisfaction of a time-based service condition.

However, in order to vest, a liquidity event, defined as acquisition, asset transfer, or initial listing, must occur within 10 years from the grant date.

Upon a liquidity event, if the participant’s service has not terminated, the entire RSA award vests in full, whether or not previously eligible for vesting.

If the participant’s service has terminated and they have satisfied the time-based service condition, the RSAs that are outstanding and eligible for vesting immediately vest in full upon liquidity event.

The time-based service requirements of the RSAs have a maximum term of three years from the date of grant.

As of December 31, 2022, there were 2,535,825 outstanding unvested RSAs with a weighted average grant date fair value of $ 1.08 .

The Business Combination constituted a “liquidity event” which caused the vesting of all such outstanding, unvested RSAs.

The vesting of the RSAs resulted in compensation expense of $ 2,741 for the year ended December 31, 2023, respectively.

There was no compensation expense recorded in the comparable periods in 2022, because the Company concluded that the liquidity event performance condition was not probable of being satisfied at the time.

In connection with the vesting of these RSAs, certain holders of the RSAs surrendered 771,141 shares in a withhold to cover transaction to fund the payment of applicable tax withholding on their behalf by the Company.

This resulted in a total cash payment of $ 7,650 by the Company to the Internal Revenue Service for the applicable tax withholding associated with this vesting event.

Liability-Classified Awards

Under a phantom equity sub-plan of the LTIP, certain non-US employees of the Company were provided with Phantom RSUs that can only be settled in cash and are therefore recorded as a liability.

The Phantom RSUs have a graded vesting schedule and vest in 3 equal tranches on the first, second, and third anniversaries of the vesting commencement date, subject to the employee meeting the requisite service requirements.

Grantees are entitled to receive a cash payment equal to the fair market value of a share multiplied by the number of vested RSUs as of the applicable vesting date.

Under a phantom equity sub-plan of the LTIP, certain non-US employees of the company were provided with Phantom SARs that can only be settled in cash and are therefore recorded as a liability.

The Phantom SARs have a graded vesting schedule and vest in three equal tranches on the first, second, and third anniversaries of the vesting commencement date, subject to the employee meeting the requisite service requirements.

Phantom SARs expire 10 years after the grant date and entitle the grantee to receive a cash payment upon exercise of the award equal to the excess of the fair market value of a share on the date of exercise over the exercise price multiplied by the number of SARs exercised.

Note 15 — Related Party Transactions

As of December 31, 2023 and December 31, 2022, the Company has an equity ownership in LanzaJet and SGLT (see Note 6 - Investments for further details).

The table below summarizes amounts related to transactions with these related parties (in thousands) :

December 31, 2023 December 31, 2022

Accounts receivable $ 2,190 $ 1,821

Contract Assets

Notes receivable 5,436 —

Accounts payable 582 3,195

The following table presents revenue from related parties per disaggregated revenue categories:

Year Ended December 31,

Revenue from related parties, included within Licensing $ 3,449 $ 2,160

Revenue from related parties, included within Engineering and other services 2,363 810

The main transactions with related parties are described below:

The Company and LanzaJet have entered into a master service agreements defining the terms when LanzaJet is a subcontractor for some of the Company’s projects, and conversely, when the Company is a subcontractor for LanzaJet’s projects.

The accounts payable balance is for work that LanzaJet performed as a subcontractor to the Company.

In connection with the formation of LanzaJet, the Company entered into a transition services agreement with LanzaJet, refer to Note 6 - Investments , for more information.

The transition services agreement generally sets out the respective rights, responsibilities and obligations of the Company and LanzaJet with respect to R&D services, access to office and laboratory space, business development and other administrative support services.

The transition services agreement may be terminated by mutual consent of the Company and LanzaJet, by LanzaJet at any time, and by the Company upon breach or non-payment by LanzaJet.

There are no substantive termination penalties in the

event the Company terminates.

For the years ended December 31, 2023 and 2022, the Company recognized revenue from related parties of approximately $ 245 and $ 185 , respectively, under the transition services agreement.

The Company also provides certain engineering and other services related to a gas-to-jet demonstration plant currently in development by LanzaJet pursuant to the Investment Agreement described in Note 6 - Investments and other projects whereby LanzaJet is the customer.

The Company recognized revenue of $ 468 for the year ended December 31, 2023 and an immaterial amount of revenue for the year ended December 31, 2022.

In 2023, LanzaTech additionally sold LanzaJet the right to utilize some of LanzaTech’s completed engineering work as a basis for future LanzaJet projects and recorded revenue of $ 2,000 , net of $ 461 of intra-entity profit elimination, with deferred payment terms no later than December 2024.

LanzaJet Note Purchase Agreement

On November 9, 2022, the Company and the other LanzaJet shareholders entered into a Note Purchase Agreement (the “Note Purchase Agreement”), pursuant to which LanzaJet Freedom Pines Fuels LLC (“FPF”), a wholly owned subsidiary of LanzaJet, will issue, from time to time, notes in an aggregate principal amount of up to $ 147.0 million (the “Notes”), comprised of approximately $ 113.5 million aggregate principal amount of 6.00 % Senior Secured Notes maturing December 31, 2043 and $ 33.5 million aggregate principal amount of 6.00 % Subordinated Secured Notes maturing December 31, 2043.

The Company committed to purchase $ 5.5 million of Subordinated Secured Notes, which was funded on May 1, 2023.

The Senior Secured Notes are secured by a security interest over substantially all assets of FPF, and both the Senior Secured Notes and the Subordinated Secured Notes are secured by a security interest over the intellectual property owned or in-licensed by LanzaJet.

Each purchaser of Notes under the Note Purchase Agreement also received a warrant for the right to purchase 575,000 shares of common stock of LanzaJet for each $ 10 million of Notes purchased by such purchaser for an exercise price of $ 0.01 per share.

The warrants are exercisable when the related loan commitment is funded, and may be exercised until the earlier of the third anniversary following the date the holder’s loan commitment is fully funded, or the end of the availability period as defined in the Note Purchase Agreement if the commitment has not been fully funded.

In the case of the Company, LanzaTech received warrants to purchase 316,250 shares of common stock of LanzaJet, which became exercisable by the Company when the note was funded on May 1, 2023.

Upon funding of the Notes, the warrants meet the accounting criteria to be considered in-substance common stock, and are accounted for as part of the equity-method investment.

Refer to Note 6 - Investments.

The Note Purchase Agreement may be amended with the approval of holders of at least 66 2∕3% of the Notes, except with respect to certain rights that require approval of all holders to amend.

Upon an event of default under the Note Purchase Agreement, each purchaser may accelerate the payment of its own Notes.

Enforcement against the collateral securing the Notes requires the approval of certain holders as specified in the Notes.

The Company supplies SGLT with certain water-soluble organic compounds required in the Company's proprietary gas fermentation process, small-size equipment and consulting services.

For the years ended December 31, 2023 and 2022, the Company recognized revenue of approximately $ 75 and $ 289 , respectively.

The Company also provided engineering services and incurred costs of $ 853 and $ 645 for the years ended December 31, 2023 and 2022, respectively.

Additionally, LanzaTech and SGLT entered into a license agreement in 2019, subsequently amended in August 2023, to provide SGLT with the right to sublicense the intellectual property that LanzaTech previously licensed to SGLT.

In exchange, the Company is entitled to receive fixed licensing consideration, calculated as a percentage of the maximum amount of royalties owed to SGLT from its sublicenses.

For the year ended December 31, 2023, the Company recognized sublicensing revenue of $ 1,200 .

Prior to June 2023, the Company was only entitled to royalties from SGLT if SGLT received sublicense royalty payments.

For the twelve months ended months ended December 31, 2022, the Company did not recognize any sublicensing revenue as no royalties were received by SGLT.

Note 16 — Redeemable, Convertible Preferred Stock

Prior to the Business Combination, the Company had six outstanding series of contingently redeemable convertible preferred stock.

The dollar amounts and share counts in the table below are adjusted to reflect the impact of the exchange ratio on the shares authorized, shares issued and outstanding, and issue price.

The authorized, issued and outstanding shares, issue price, and carrying value as of December 31, 2022 are as follows (in thousands, except share and per share amounts):

Shares Authorized Shares

Outstanding Issue Price Carrying

Series A 20,414,445 20,414,445 $ 0.40 - $ 0.90

Series B 7,582,934 7,582,934 2.37 18,000

Series C 18,613,084 18,121,698 3.36 60,850

Series D 44,946,572 44,452,681 4.56 188,402

Series E 22,678,139 22,678,139 5.23 118,076

Series F 15,898,496 15,898,496 5.23 83,073

130,133,670 129,148,393 $ 480,631

All redeemable, convertible preferred stock was converted into common shares on the Closing Date of the Business Combination on a 1 :1 basis.

Immediately before the conversion, all cumulative dividends were declared, totaling a dividend payable of $ 241,529 .

This dividend was paid in-kind and subsequently converted, as a result of the Business Combination, into an additional 24,152,942 common shares.

After the in-kind dividend payment and the conversion, the former preferred shareholders held 153,895,644 common shares.

Prior to the Business Combination, redemption features of the preferred shares were not fixed and did not have a determinable price on fixed or determinable dates.

As of December 31, 2022, the preferred shares were not currently redeemable, and it was not probable that the preferred shares would become redeemable, since it was uncertain whether or when circumstances exist that would constitute a deemed liquidation event.

Accordingly, the Company did not adjust the carrying value of the preferred shares to their redemption values.

Note 17 — Commitments and Contingencies

The Company may be involved in legal proceedings and exposed to potential claims in the normal course of business.

As of December 31, 2023 and December 31, 2022, the Company does not have any reasonably possible or probable losses from such claims.

In November 2022, the Company entered into a lease for real estate to expand its headquarters in Skokie, Illinois.

The lease was subsequently amended in December 2023.

The lease contains multiple lease components, and the commencement date for some lease components will occur in April and May 2024.

Accordingly, for these lease components where the lease has not commenced, there are no right-of-use assets or lease liabilities recorded on the consolidated balance sheets as of December 31, 2023.

Total lease payments through 2036 for these lease components are expected to be $ 17,216 .

Note 18 — Leases

The Company leases certain office space and laboratory facilities.

The Company’s lease agreements typically do not contain any significant guarantees of asset values at the end of a lease, renewal options or restrictive covenants.

Pursuant to ASC 842, Leases , all leases are classified as operating leases.

Total operating lease costs and variable lease costs for the years ended December 31, 2023 and 2022 were $ 2,702 and $ 2,167 and $ 3,205 and $ 2,227 , respectively.

Cash paid for amounts included in the measurement of operating lease liabilities for the years ended December 31, 2023 and 2022 was $ 1,857 and $ 2,370 , respectively.

As of December 31, 2023, lease payments for operating leases for the Company’s office facility and laboratories are shown below (in thousands):

Year ending December 31,

Thereafter 27,039

Total lease payments $ 34,698

imputed interest 14,756

Total lease liabilities $ 19,942

The following is a summary of weighted average remaining lease term and discount rate for all of the Company’s operating leases:

Year Ended December 31,

Weighted average remaining lease term (years) 12.7 3.5

Weighted average discount rate 7.50 % 7.50 %

Lessor accounting

In May 2020, the Company executed an agreement to lease certain land to a subsidiary of LanzaJet for a period of 10 years with an option to renew this lease for five additional periods of one year with minimum annual rent due.

This agreement is accounted for as an operating lease.

In February 2022, the lease agreement with LanzaJet was amended to extend the pre-development term of the lease until the earlier of commencement of construction of the alcohol-to-jet fuel facility on the leased land or December 31, 2023, increased the annual base rent amount and increased the term from 10 years to 12 years.

Additionally, the subsidiary of LanzaJet was granted an option to renew this lease for thirteen additional periods of one year .

In August 2022, the lease agreement was amended further to increase the annual rent due upon commencement of construction of the alcohol-to-jet fuel facility.

We recognize lease revenue on a straight-line basis over the life of the lease agreement.

The following future minimum lease payments due to us from the lease agreement at December 31, 2023, is as follows (in thousands)

Year ending December 31,

Thereafter 1,088

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

On February 8, 2023, Board approved a resolution appointing Deloitte & Touche, LLP (“Deloitte”) as New LanzaTech’s independent registered public accounting firm to audit New LanzaTech’s consolidated financial statements for the fiscal year ending December 31, 2023.

Deloitte served as the independent registered public accounting firm of Legacy LanzaTech prior to the Business Combination.

Accordingly, Marcum LLP (“Marcum”), AMCI’s independent registered public accounting firm prior to the Business Combination, was informed on February 8, 2023 that it will be dismissed as New LanzaTech’s independent registered public accounting firm, effective in March 28, 2023 upon completion of Marcum’s audit of AMCI’s consolidated financial statements as of and for the year ended December 31, 2022, and the issuance of their report thereon.

The report of Marcum on AMCI’s consolidated financial statements as of and for the fiscal years ended December 31, 2022 and 2021 did not contain an adverse opinion or a disclaimer of opinion, and were not qualified or modified as to uncertainties, audit scope or accounting principles.

During AMCI’s fiscal years ended December 31, 2022 and 2021, there were no disagreements between AMCI and Marcum on any matter of accounting principles or practices, financial disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Marcum, would have caused it to make reference to the subject matter of the disagreements in its reports on AMCI’s consolidated financial statements for such year.

During AMCI’s fiscal years ended December 31, 2022 and 2021, there were no “reportable events” (as defined in Item 304(a)(1)(v) of Regulation S-K (“Regulation S-K”) under the Exchange Act), except that Marcum advised AMCI of material weaknesses related to:

(i) the accounting for certain complex financial instruments and (ii) the accounting of certain fees related to financial advisory and placement agent services.

New LanzaTech provided Marcum with a copy of the foregoing disclosures and has requested that Marcum furnish New LanzaTech with a letter addressed to the SEC stating whether it agrees with the statements made by New LanzaTech set forth above.

A copy of Marcum’s letter, dated March 28, 2023, is filed as Exhibit 16.1 hereto.

During the fiscal years ended December 31, 2022 and 2021 neither New LanzaTech, nor any party on behalf of New LanzaTech, consulted with Deloitte with respect to either (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of the audit opinion that might be rendered with respect to New LanzaTech’s consolidated financial statements, and no written report or oral advice was provided to New LanzaTech by Deloitte that was an important factor considered by New LanzaTech in reaching a decision as to any accounting, auditing or financial reporting issue, or (ii) any matter that was subject to any disagreement (as that term is defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) or a reportable event (as that term is defined in Item 304(a)(1)(v) of Regulation S-K).

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data